B Law & Tax
02 February 2024

Tax Advisor: Retroactivity of the Beckham Law for 2024

In 2024, the retroactivity of the Beckham Law has been implemented.

Retroactivity means that the effects of this law apply to periods prior to the moment when the regulatory update came into force, which may have tax implications for affected taxpayers.

This legal update in Spain has closed a loophole affecting expatriates and has sparked optimism in the fiscal realm. The Ministry of Finance has taken steps to clarify the status of foreign workers in relation to the special tax regime known as the “Beckham Law”.

What does the Beckham Law offer?

The Beckham Law offers tax advantages to foreign workers in Spain, allowing them to opt for taxation under the Non-Resident Income Tax (IRNR) with fixed rates of 24% up to 600,000 euros and 47% for higher incomes. The Startup Law of 2022 expanded eligibility for this regime, attracting international talent. However, the lack of specific regulation left many workers in uncertainty.

Royal Decree: Retroactive Beckham Law and tax reforms

The uncertainty has been resolved with the issuance of a Royal Decree that normalizes the status of these employees, enabling the retroactive application of the Beckham Law. Those taxpayers who establish their tax residence in Spain during the 2023 tax year, and who have moved in 2022 or 2023, will have a six-month period to choose this special regime once the Order with the required form is promulgated.

Along with the retroactive application of the Beckham Law, the Royal Decree introduces other important changes. The income threshold for the obligation to file a tax return in situations of multiple payers is modified, the declaration of Personal Income Tax (IRPF) is established for self-employed workers, and the withholding percentages on labor income for creators of literary, artistic, or scientific works are adjusted.

In summary:

The implementation of the retroactivity of the Beckham Law in 2024 has resolved a significant legal loophole affecting expatriates in Spain, generating positive expectations in the fiscal realm.

The issued Royal Decree has provided clarity to the situation of foreign workers, allowing the retroactive application of the law and offering a deadline for taxpayers to choose this special regime.

Furthermore, other significant reforms have been introduced, such as the modification of income thresholds for tax declaration and adjustments in withholding percentages on certain labor incomes. These measures aim to improve transparency and equity in the Spanish tax system, while promoting the attraction of international talent and stimulating entrepreneurship.

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