What Are the Requirements of the Beckham Law? Save on Taxes When Moving to Spain

The special tax regime for workers relocating to Spain, commonly known as the “Beckham Law”, has undergone significant changes since its initial implementation. The latest reform, introduced by Law 28/2022 for the promotion of the startup ecosystem, has expanded its scope and eased its requirements, making it a more attractive tool for drawing international talent.

This regime can result in substantial tax savings, so if you’re considering relocating to Spain, it’s essential to understand the requirements for applying the Beckham Law and its main advantages.

What Is the Beckham Law and Why Is It So Beneficial?

This is a special tax regime that allows individuals who become tax residents in Spain due to employment-related relocation to opt to be taxed under the Non-Resident Income Tax (NRIT) system, while maintaining the status of personal income tax (PIT) taxpayers, for the year of the move and the following five tax years.

Key Advantages of the Beckham Law

Being taxed under the non-resident regime provides considerable advantages, especially concerning employment income:

• A flat tax rate of 24% applies to employment income up to €600,000 per year.

• A 47% rate applies to employment income exceeding €600,000.

This means that beneficiaries pay a flat tax rate, unlike the progressive tax rates under the standard Personal Income Tax (PIT) system, where higher income leads to higher taxation.

Regarding investment income (dividends, interest, capital gains, etc.), the applicable tax rates are as follows:

• 19% up to €6,000
• 21% from €6,000 to €44,000
• 23% from €44,000 to €150,000
• 27% from €150,000 to €200,000
• 28% over €200,000

In addition to employment and investment income, this regime also applies to specific scenarios, such as severance payments, which may receive more favorable tax treatment under certain conditions.

Requirements to Apply for the Beckham Law

1. No Prior Tax Residency in Spain
   The applicant must not have been a tax resident in Spain during the five tax years prior to the relocation (previously ten years).
2. No Income from a Permanent Establishment
   The applicant must not earn income through a permanent establishment in Spain (exceptions apply for entrepreneurs and highly qualified professionals).
3. Valid Reason for Relocation
   The move to Spain must be for a qualifying reason. The relocation may occur either in the same year the regime is applied or in the preceding year. Acceptable reasons include:

Employment contract in Spain

This requirement is met when:

• A contractual employment relationship begins with a Spanish employer.

• The relocation is ordered by a foreign employer and evidenced by a secondment letter. The activity is performed remotely (e.g., digital nomads) using exclusively digital/telecommunication tools.

Appointment as Director of a Company

The individual relocates to Spain due to appointment as a company administrator. If the company is classified as a holding entity, the administrator must not hold a shareholding that results in the company being considered a related entity.

Entrepreneurial Activity

The move results from launching an entrepreneurial activity in Spain, considered “innovative and of special economic interest to Spain,” subject to a favorable report by the relevant government authority. Job creation and economic contribution are key evaluation factors.

Highly Qualified Professional Activity

The relocation results from a highly qualified professional providing services to startups or performing training, R&D, or innovation activities. At least 40% of the individual’s total income must come from these activities.

Application Procedure

The application must be filed within six months from the start of activity in Spain or the date of registration with Spanish Social Security, whichever occurs first. Required documentation includes:

• Form 149 duly completed.

• Employment contract or other documentation supporting the reason for relocation (secondment letter, appointment letter, proof of entrepreneurial project, etc.).

• Certificate of tax residency in the previous country, issued by its tax authority.

• Additional documents depending on the applicable scenario (e.g., favorable report for innovation activity).

Application to Family Members

Spouses and children under 25 years of age (or of any age if disabled) may also benefit from this special regime, provided they meet the following conditions:

• They relocate to Spain with the main applicant, either simultaneously or afterward, provided the principal taxpayer is still within the first year of the regime’s application.

• They become tax residents in Spain.

• They were not tax residents in Spain in the five tax years prior to relocation.

• They do not earn income through a permanent establishment in Spain.

• The sum of the taxable bases of the family members must be less than that of the principal applicant in each applicable tax year.

If the primary applicant is denied the application of the special regime, the family members will also lose eligibility.

✅ Interested in Applying for the Beckham Law?

We can assist you with a detailed analysis of your personal case, support your application, and ensure that all requirements are met to benefit from the Beckham Law.

📲 Contact our experts for more information.