The Beckham Law regime is a special tax system for foreign workers who move to Spain. Its aim is to encourage the arrival of international talent by offering advantageous tax treatment for a period of time, facilitating both their incorporation into the Spanish labour market and the financial planning of their assets.
In order to qualify for the Beckham Law regime, the posted worker must not have been a tax resident in Spain for the last five years. The regulations establish that it can only be applied to income generated in Spanish territory and for a maximum of six years from the moment of residence. For example, a US executive who accepts a position in Madrid and meets the residency requirements may be taxed at 24% on the first €600,000 of annual income instead of the general progressive rate, which can exceed 45%.
According to experts at Joan Cerdà, a consultancy with over 50 years’ experience in international taxation, this regime not only offers significant tax savings but also requires careful planning. Correct application requires strict compliance with the deadlines for notification to the Tax Agency and proper documentation of the status of posted worker. An error in the application may result in the loss of benefits and penalties.
Beckham Law Regime: Benefits and requirements
Tax benefits
The main benefit of the Beckham Law regime is the reduced flat rate of 24% on the first €600,000 that may be received from employment income. In addition, other income earned outside Spain, such as dividends, interest and capital gains, does not have to be declared in Spain, which benefits all expatriates who receive passive income abroad.
Practical example
Let’s imagine Ana, a German engineer who is hired by a multinational company in Barcelona with an annual salary of €500,000. Under the general regime, she could be taxed on around €225,000. Under the Beckham Law regime, her tax burden is reduced to €120,000, assuming that all the conditions are met and the documentation is in order. This saving is a decisive factor when planning the move and the net remuneration.
In addition, the application of this tax regime means that posted workers are not required to pay tax in Spain on their assets located abroad, but only have to declare their assets located in Spain. They are also exempt from the obligation to file an informative return on assets or virtual currencies located abroad (forms 720 and 721).
Application requirements
- Tax residence: Not having resided in Spain in the last 5 years.
- Work-related reason: The move to Spain must be for work-related reasons (employment contract with a Spanish company, relocation to Spain by decision of the foreign company or by decision of the employee who works exclusively remotely (teleworking), appointment as director of a Spanish entity, carrying out activities classified as entrepreneurial, among others).
- Application within the deadlines: In general, it must be submitted to the Tax Agency within a maximum period of six months from the date of commencement of activity as recorded in the Spanish Social Security register.
- Limited duration: The regime applies for a maximum of six years, provided that the conditions required for the application of the regime are maintained.
It is important to note that spouses (or parents of their children in the absence of a marital relationship) and children under the age of twenty-five or of any age in the case of disability may also opt to apply this tax regime, provided that certain conditions are met.
The Beckham Law regime is an effective tool for attracting international talent to Spain, offering clear tax advantages but subject to strict conditions. Professionals and companies planning to take advantage of this regime should seek expert support to maximise the benefits and avoid costly mistakes. For any queries on how to apply the regime correctly or calculate the expected tax savings, Joan Cerdà offers personalised advice updated in line with current regulations.