B Law & Tax
14 November 2023

Tax advisor: Beckham Law: pending regulatory development

Foreign workers planning to arrive in Spain in 2023 face some legal uncertainty due to the delay in the approval of the regulations for the ‘Beckham Law,’ which allows foreigners to be taxed through the Non-Resident Income Tax (IRNR) instead of the Personal Income Tax (IRPF), with a fixed rate of 24% up to 600,000 euros and 47% for higher gains.

The so-called “Startup Law” (Law 28/2022, of December 21, on the promotion of the emerging business ecosystem), implemented to attract foreign talent, expanded the list, previously established by the Beckham Law, of individuals eligible for this regime. This includes, among others, digital nomads, entrepreneurs, professionals considered highly qualified, as well as the spouses and children under 25 years of age of the main taxpayer. However, these groups are experiencing difficulties in obtaining the regime due to the lack of regulatory development by the Administration, which will provide details on the conditions these individuals must meet to qualify as beneficiaries of this regime. In this regard, the current situation leaves taxpayers and employers uncertain about the applicable withholdings, especially regarding the tax filing in June 2024.

For those affected, it is advisable to apply for the special tax regime using the draft regulations as a reference. In case of excessive withholdings in 2023 due to the lack of communication about the regime, the corresponding refund should be requested when filing the annual declaration. These changes mark a significant shift in the taxation of foreign workers in Spain in 2023.

 

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