BackThe new Startup Law in Spain has brought with it many changes. Perhaps one of the most significant has been in terms of taxation, more specifically the increase in the number of different cases or scenarios in which individuals can take advantage of the Spanish Beckham Law.
The Beckham Law is a Spanish special tax regime that allows individuals to be taxed based on non-resident tax regulations, even if they stay in Spain for more than 183 days.
As of 2023, in particular, digital nomads can take advantage of this regime. Also, it is applicable for people who come to Spain because of an employment contract or for being appointed as a director of a Spanish company.
One of the requirements to apply is to not have been a tax resident in Spain for the previous 5 years. An additional requirement to qualify for the benefits of the Beckham Law is to not obtain income that would be classified as obtained through a permanent establishment located in Spanish territory.
Once applied and granted by the Spanish Tax Office, the Beckham Law lasts for a total of 6 years. After this period, the general regime for ordinary tax residents will apply.
What are the tax benefits of the Beckham Law in Spain?
Digital nomads in Spain under the Beckham Law are taxed at a fixed tax rate of 24% on their salary up to €600,000, and 47% on any amount exceeding this limit (per year). This is a significant advantage because, ordinary tax residents are taxed under a progressive tax rate that can exceed 50% in some cases.
In addition, individuals under the Beckham Law are taxable only on Spanish sourced income. Therefore, dividends and capital gains obtained outside Spain are not taxable. It is important to note that, regarding employment income, digital nomads will be taxed on all income earned both within and outside of Spain.
Also, it should be noted that individuals under the Beckham Law are taxed only on Spanish assets in Wealth Tax, whereas ordinary tax residents are taxed on worldwide assets.
As a new possibility with this Startup Law, both the spouse accompanying the digital nomad and children under 25 years of age (except in the case of disability) may also opt for the application of the Beckham Law. To do so, they must meet certain conditions.
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