BackAccording to statistical data, in the year 2023, more than 10,000 individuals seemed to be eligible to benefit from what is known as the Beckham Law. This special regime is designed for foreign workers who are relocated in Spanish territory and, from a tax perspective, is beneficial for this group.
All those workers coming from abroad and transferring their tax residence to Spain could consider this regime. However, it is important to carefully evaluate the advantages and disadvantages of this system, as well as the requirements for a foreigner residing in Spain to opt for it.
Can any foreign independent worker benefit from the Beckham Law?
Through various media and informational spaces, reference is constantly made to those individuals who can benefit from what is known as the Beckham Law. Essentially, it is the possibility of entering into a special taxation regime in Spain, but under particular conditions.
It is generally stated that those who can benefit from this law usually have significant incomes. In fact, the name comes from the renowned former Real Madrid player, David Beckham, who had his tax residence in Spain despite being originally from England.
However, not everyone meets the necessary requirements to be part of this specific regime, and it is important to clarify the characteristics of the foreign independent worker who could indeed be subject to this tax consideration.
- It is essential not to have been a resident in Spain in the five years prior to the relocation that would now lead to consideration for the Beckham Law. This means that if someone intends to change their tax residence to Spain from outside the country, they should do so upon arrival and not wait for several years.
- Having reached the status of being a director of an entity is another condition that must be met
- Starting an entrepreneurial activity in Spain is another reason why the Tax Agency may consider someone suitable for this law.
- Engaging in economic activity as a highly qualified professional is another requirement that could provide many options for being eligible for the Beckham law.
The only condition that is absolutely mandatory to be selected to be under the Beckham Law regime is not having been a resident in Spain in the previous five years. Of the three following conditions, at least one should be met.
Updates to the Beckham Law introduced by the Startup Law
We will present the requirements that must be met for its application, highlighting the updates introduced by the Startup Law:
1) Not having been a tax resident in Spain during the five tax periods prior to the relocation to Spanish territory. Before the entry into force of this law, this period was 10 years.
2) Not obtaining income classified as obtained through a permanent establishment in Spain.
3) The relocation to Spanish territory must occur in the first year of application of the regime or in the previous year, due to one of the following circumstances:
- An employment contract: Since 2023, foreign teleworkers or digital nomads with a visa for international teleworking according to Law 14/2013, supporting entrepreneurs and their internationalization.
- Administrators of an entity, regardless of their percentage of ownership, except for administrators of asset-holding companies.
- Entrepreneurs conducting an economic activity classified as entrepreneurial according to the procedure described in Law 14/2013.
- Highly qualified professionals performing activities in Spain for startups or activities in training, research, development, and innovation, with a remuneration representing more than 40% of their income.
- Family members of the taxpayer under 25 years of age or with disabilities, as well as the taxpayer’s spouse, who move with them and acquire tax residence in Spain, and whose taxable bases are lower than those of the taxpayer giving rise to the special regime.
Benefits of Opting for the Beckham Law
The Beckham Law offers several tax benefits for workers acquiring tax residency in Spain due to their relocation to the country. These benefits include taxation for 6 years under the Non-Resident Income Tax (IRNR), while maintaining the status of Personal Income Tax (IRPF) taxpayers. The main advantages of this regime include taxation only on income generated in Spain, at a flat rate of 24% up to 600,000 euros, avoiding the obligation to pay taxes on global income in Spain.
Additionally, beneficiaries only pay taxes on assets located in Spain under the Wealth Tax and the Temporary Solidarity Tax on Large Fortunes, and are exempt from filing the annual declaration of assets abroad (model 720).
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