The so-called Beckham Law is the name given to the special tax regime applicable to certain workers, professionals, entrepreneurs, and investors relocating to Spain. Its main advantage is that it allows those who acquire Spanish tax residency to be taxed, for a limited period, according to the special rules of the Non-Resident Income Tax, while maintaining their status as taxpayers under the Personal Income Tax (IRPF).
The regime can be particularly attractive for international professionals, seconded workers, managers, entrepreneurs, and those relocating their business to Spain. However, it is not automatic: it is necessary to meet the legal requirements and submit the application within the deadline.
What is the Beckham Law?
The regime is primarily regulated in Article 93 of the Personal Income Tax Law. Those who opt for it remain personal income tax payers, but are taxed according to certain rules specific to the non-resident regime.
During the application period:
- The general tax base is generally taxed at 24% up to €600,000.
- The amount exceeding €600,000 is taxed at 47%.
- Savings income follows a specific scale.
- The regime remains in effect during the year of the transfer and the following five years.
The effective taxation will depend on the type of income obtained, its amount, its origin and whether all the required conditions are met.
Who is eligible?
Since the reform applicable from 2023, the scheme has been extended to new groups. Among others, the following can be included:
- Workers posted to Spain on an employment contract.
- People who relocate to work remotely for a foreign company.
- Administrators of certain companies.
- Entrepreneurs.
- Highly qualified professionals.
- People who carry out training, research, development or innovation activities.
- Certain relatives of the main taxpayer.
The Spanish Tax Agency requires that the move to Spain be related to one of the legally established reasons. Simply changing your residence or registering as self-employed is not sufficient.
Recent binding consultation: importance of the administrative criterion
The binding rulings of the Directorate General of Taxes do not replace the law, but they allow one to know how the Administration interprets the requirements of article 93 of the Personal Income Tax Law.
Recent legal doctrine maintains one essential idea: the applicable tax regime must be analyzed considering the real reason for the relocation and the activity actually carried out. It is not enough to formally meet a requirement if the economic reality demonstrates that the person was already carrying out the activity from Spain or that the relocation was not the reason for the change of residence.
In particular, recent administrative consultations and criteria should be reviewed when the following occur:
- I work remotely for a foreign company.
- Self-employed professional activities.
- Participation in Spanish companies.
- Structures with foreign companies or LLCs.
- Changes of employer after displacement.
- Activities carried out for several related entities.
Contractual documentation, the date of entry into Spain, employment or professional registration, and the actual organization of the activity are determining factors.
Deadline to apply for the Beckham Law
The option is exercised using form 149. For the main taxpayer, the general deadline is six months from the start of the activity that motivates the move to Spain.
Failure to submit the form within the deadline may prevent the application of the regime, even if the other material requirements are met.
Conclusion
The Beckham Law can offer significant advantages for those who move their tax residence to Spain, but it requires prior planning and a detailed analysis of the activity, the corporate structure and the income obtained.
Recent administrative interpretations confirm the importance of demonstrating that the move to Spain is real and that there is an effective connection between the move and the activity that allows one to benefit from the regime.
At TSR Group, a law firm in Barcelona, we advise relocated workers, managers, entrepreneurs and international professionals on the application of the Beckham Law, tax residency and international tax planning.
Before moving to Spain or starting a professional activity, it is advisable to check compliance with the requirements and deadlines of form 149.