The Personal Income Tax Regulation, as well as Model 149, used to request the expatriate regime, and Model 151, used for tax declaration by these taxpayers, have been adjusted to reflect the amendments incorporated in this area by the Startup Law.
On December 6, 2023, Royal Decree 1008/2023 was published in the Official State Gazette (BOE), making adjustments to the Personal Income Tax Regulation. These amendments focus specifically on the special regime applicable to workers relocated to Spain, known as the expatriate regime, to align with the new provisions established by the Startup Law regarding the application of this regime.
In line with these modifications, on December 15, 2023, the Ministerial Order was issued, including Model 149, used to request the expatriate regime, and Model 151, intended for tax declaration for these taxpayers.
Key Innovations of the 2023 Startup Law
On January 1, 2023, Law 28/2022, of December 21, aimed at promoting the development of the startup ecosystem (known as the Startup Law), came into effect. This legislation introduced improvements to the expatriate regime. Among the most notable changes is the expansion of the scope of the regime, covering new cases such as telecommuters, innovative entrepreneurs, highly qualified professionals focused on specific training, research, and development (R&D) activities, as well as administrators, regardless of the percentage of ownership they hold in the company.
Update of the expatriate regime: key decrees post-Startup Law
Royal Decree 1008/2023, issued on December 6, 2023, in the Official State Gazette, responds to the need to adjust the Personal Income Tax Regulation (IRPF) to the modifications introduced by the Startup Law. It focuses specifically on the expatriate regime, introducing significant changes:
- Defines new conditions to apply for the expatriate regime, including concepts such as entrepreneurial activity and highly qualified professional, with specific criteria for training or R&D+i activities.
- Clarifies the deadline for the relocation of family members of taxpayers under the special regime.
- Specifies that withholdings will apply exclusively to income derived from professional activities within the income generated from economic activities. Additionally, it establishes formal obligations related to records and invoice retention.
- Modifies the rules for waiver and exclusion, including spouses/parents of the taxpayer’s children, with waivers and exclusions mostly individual.
- Details additional documentation required to access the expatriate regime in new cases.
- Establishes a transitional regime for those who acquired residence in Spain in 2023 due to a relocation in 2022 or 2023, allowing them to exercise the option within a maximum period of 6 months from the entry into force of the ministerial order of the new communication model for the option for the expatriate regime, published in the BOE on December 15, 2023.
Tax models adapted to the new expatriate regime: Law 28/2022 and Royal Decree 1008/2023
On December 15, 2023, according to the legal and regulatory modifications introduced by Law 28/2022 and Royal Decree 1008/2023, the Ministerial Order approving Models 149 and 151 was published in the Official State Gazette (BOE). These models are adapted to the content of the special regime applicable to professional workers, entrepreneurs, and investors relocated to Spain, in effect since January 1, 2023. Model 149 is used for communication of the option, waiver, exclusion, or end of relocation, while Model 151 is for the declaration of Personal Income Tax in this special regime.
Beckham Law: Six-Month Period
A period of 6 months is granted from the approval of the order to request the benefits provided by this regime. It is important to remember that the criteria to benefit from the Beckham Law are as follows:
- Demonstrate that you have not been a tax resident in Spain in the 5 years prior to relocation.
- Prove the date of entry into Spain.
- Submit a document from the employer confirming the employment relationship with the taxpayer, indicating the start date of the activity (registered with social security) and the approximate duration of the employment relationship.
- The relocation to Spain must occur either in the first year of applying the regime or in the previous year, due to certain circumstances, such as the signing of an employment contract (except for professional athletes under Royal Decree 1006/1985 of June 26). This condition is also met if a new employment relationship is initiated in Spain, or if the relocation is ordered by the employer with a relocation letter.
It is important to note that Binding Consultation DGT 0777/19 states that if there is a prolonged period between relocation to Spain and the start of the employment relationship, the requirement established in the Personal Income Tax Law, article 93.31 b), is not met, and the special regime cannot be opted for.
Beckham Law application deadline for new groups and dependents
With the publication of the ministerial order regulating the new model 149 to request the Special Regime (Beckham Law), by virtue of its transitional provision, the deadline for said application for those displaced to Spain during 2023, who belong to the new groups and dependents who can already exercise the option and who have already acquired their tax residence, is 6 months from the date of entry into force of the aforementioned ministerial order, that is, from December 16, 2023. In this way, The 6-month period to submit your application will end on June 16, 2024.
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