B Law & Tax
21 December 2023

Tax Advisor: New Tax Opportunities in Spain: Approval of the Impatriates Regime and Its Benefits

Good news for investors, entrepreneurs, and professionals in general, whether they are executives, digital nomads, self-employed, or employees, as long as they are tax residents abroad and are considering investing or establishing themselves in Spain. After a wait of 359 days, on Friday, December 15, the application model, along with the annual tax return, was approved for the new Impatriates Regime, also known as the Beckham Law.

 

Implications of the new regime after the issuance of the ministerial order

The issuance of the ministerial order marks the end of the legislative process initiated in 2022 with the modification of regulations through the Start-Ups Law, which amended the Personal Income Tax Law 35/2006. The delay was due to adjustments in the Personal Income Tax Regulations and the approval of formalities related to the application model and declaration. This change provides the option for individuals who would otherwise be fully subject to income tax and wealth tax in Spain and abroad to choose a tax regime with a fixed rate of 24% for income tax and no taxation on foreign assets. In addition, an exemption from wealth tax of up to 6 million is contemplated for couples or marriages. Incomes generated abroad will also not be subject to taxes in Spain, regardless of their tax treatment abroad and the application of tax treaties.

 

Benefits for international investors and entrepreneurs

Unlike other countries, the Spanish tax regime does not focus on the tax treatment of foreign income. It includes benefits such as the exemption from model 720 for the declaration of foreign assets and income, non-subjection to international tax transparency, and the exit tax. Valid for 6 years, this regime, linked to the recent Start-Ups Law, offers tax incentives in corporate income tax. It stands out for not being limited to employees of foreign companies, extending to entrepreneurs and investors looking to establish businesses in Spain. It also provides benefits to entrepreneurs, self-employed individuals, and digital nomads who meet certain conditions.

The approval of this Ministerial Order opens up the opportunity for various professionals, entrepreneurs, and executives to choose Spain as a destination for their investments and business activities, also considering the location of their residences or those of their families. From our firm in Spain, in the international area, we have provided assistance to these entrepreneurs and professionals over the years so that they can plan their global tax situation, avoid possible cases of double or triple taxation, and reduce the tax risks associated with incorrect compliance with tax obligations.

 

 

 

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