B Law & Tax
30 August 2023

Tax Advisor: Key Aspects of the Beckham Law

The Beckham Law, also called Special Regime, is a tax legislation implemented in certain countries with the purpose of attracting high income individuals, especially sportsmen and celebrities. This regulation has generated extensive discussions due to its tax consequences and implications.

Eligibility for the Beckham Law

In general, expatriates who choose to move to Spain can benefit from the Beckham Law if they meet the following criteria:

– Not having been tax residents in Spain during the last five years.

– The relocation must be work-related, i.e., have received a job offer before arriving in the country (or have a Spanish digital nomad visa), move from a foreign company to Spain, or serve as a director of a company in the country with less than 25% shareholding (in case of patrimonial entities), unless they have a startup/entrepreneur visa.

– Not obtaining income that can be considered as obtained from a permanent establishment in Spain. This implies that the employing company must be Spanish (unless they have a nomad or startup/entrepreneur visa).

– They must apply for the special regime within six months of their registration in the local Spanish Social Security regime.

Advantages and disadvantages of the Beckham Law

The main benefits include that expatriates will only be taxed for income tax on their employment income globally and on income originating in Spain, such as rents and dividends from Spanish entities.

Instead of being taxed through a progressive system, those electing to take advantage of the Beckham Law will pay a flat tax of 24% up to an amount of €600,000. If income exceeds this amount, a flat tax of 45% applies.

In addition, this law entails benefits such as the exemption from filing the Model 720, an informative declaration of assets abroad. Also, the wealth tax only applies to assets in Spanish territory.

On the other hand, it should be considered that some countries, such as Germany, suspend the application of double taxation agreements when the Beckham Law is invoked, which may result in an effective double taxation of labor income, especially during the first year of residence in Spain.

Through the adoption of the “Start-Up Law”, which came into force on 01.01.2023, the requirements for accessing the Beckham Law have been reduced and the group of eligible persons has been expanded.

The amendments to the special regime now include the spouse of the main applicant, as well as children under 25 years of age or disabled (without age restriction in the latter case). The parent is also covered if there is no spousal relationship with the principal applicant. For the latter, they must move to Spain within the first year of implementation of the special regime to the main applicant and comply with specific requirements.

B Law & Tax International Tax & Legal Advisors.


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