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If you are looking for because you are interested in the Beckham Law, here is a comprehensive and up-to-date guide to understanding how it works, who is eligible and what the implications are.

What Is the Beckham Law?

The Beckham Law in Spain is one of the most advantageous tax regimes available to foreign professionals who move to the country. This regime allows certain foreign workers to be taxed in Spain as non-residents, even if they have their tax residence in the country.

Regulated by Law 35/2006 on personal income tax, amended by Royal Decree 1008/2023, and currently in force, its aim is to attract qualified international talent to companies based in Spain, reducing their tax burden for a certain period.

As its name suggests, this regime comes from footballer David Beckham, one of the first to benefit from this law during his signing with Real Madrid. 

Who can benefit from the Beckham Law?

The latest data indicates that in 2023, more than 16,000 taxpayers applied for the Beckham regime. In addition, according to data from the Tax Agency, almost 37,000 taxpayers have taken advantage of the regime in the last 10 years. But who can benefit from this regime?

It is designed for professionals who move to Spain for work reasons. Following the most recent reforms, as of 1 January 2023, its scope has been expanded to allow professionals from different sectors to access it. The main beneficiaries are:

• Employees hired by a Spanish company.
• Company directors, provided they do not own more than 25% of the share capital.
• International remote workers (digital nomads).
• Highly qualified professionals in specific sectors, such as R&D&I.
• Entrepreneurs and investors, provided they meet certain requirements.

In addition, spouses and children under the age of 25 (or with disabilities) are also eligible, provided that they move with the holder and have not resided in Spain in the previous five years.

Key benefits of the Spanish Beckham Law

Many foreigners opt for this regime when moving to Spain because of the benefits they obtain when their application is approved, thanks to the help of and other international lawyers. 

The main attraction of this regime is the significant reduction in the tax burden for a period of six years (the year of change of residence plus the following five years). The specific advantages are:

• Fixed taxation of 24% on the first €600,000 of annual income from work. Above this amount, taxation is 47%.
• No wealth tax is levied except on assets located in Spain.
• It is not mandatory to declare assets abroad using the controversial Form 720.
• No tax is levied on income earned outside Spain (interest, dividends, rents, etc.), which can mean significant savings.

As a result, foreigners will be able to plan their residence in Spain much more efficiently from a tax perspective, especially if they already have investments or large incomes in countries other than Spain. 

Requirements and how to apply

Not everyone is eligible for this scheme. There are a number of requirements that all foreign professionals must meet:

• Not having resided in Spain for the five years prior to the application.
• Moving to Spain as a result of a job offer, performing administrative duties, or starting a specific professional activity (as applicable).
• The application must be made within 6 months of the date of registration with Social Security or the Self-Employed Register.
• The activity must be carried out in Spain.

Furthermore, the application process is straightforward as long as it is done with the help of a professional. Because, in this new stage, it is best to be accompanied by the best. 

To do so, you must complete and submit Form 149 to the Tax Agency, attaching documentation proving your employment contract, registration with Social Security, NIE, passport and any other documentation that may be requested by the Agency. 

Once approved, the taxpayer must submit Form 151 annually to declare their income as a taxpayer under this regime.

Beckham Law vs the regular tax regime in Spain

The Beckham Law offers significant differences from the general tax regime for residents in Spain. While personal income tax applies a progressive rate of 19% to 47%, the Beckham regime sets a rate of 24% up to €600,000, with only the excess being taxed at 47%. In addition, those who opt for this regime are not required to file Form 720, thus avoiding having to declare assets abroad.

It also offers advantages in terms of wealth tax, as only assets located in Spain are taxed, unlike the general regime, which taxes worldwide wealth. Finally, under the Beckham Law, income earned outside Spain is not taxed, making it an attractive tax option for professionals with international income.

Common misconceptions about the Beckham Law

Its popularity in recent years has led to misunderstandings. Because no, not everything that is said about this regime is true. 

For example, this regime is not ‘only for footballers'. Currently, a wide range of professionals working in sectors such as technology, science or finance can apply for it. 

In addition, you have probably heard that ‘legal advice is not necessary' to apply for the Beckham Law. Although it may seem like a simple process, a small mistake can change everything. Poor tax planning can lead to unnecessary payments or penalties. That is why it is always advisable to seek the help of experts. 

Can you combine the Beckham Law with other expats benefits?

The Beckham Law is incompatible with other specific tax options for residents. For example, it cannot be applied if you opt for the expatriate regime in multinational companies under other formulas, nor can it be combined with the international double taxation deduction for foreign income.

However, the beneficiary can continue to access benefits related to their expatriate status, such as public healthcare, schooling for their children, and access to specific visas.

How can Pellicer & Heredia help you?

Pellicer & Heredia has become one of Spain's leading international law firms. With over 20 years of experience, they are leaders in providing personal and business advice on immigration, taxation and global mobility.

With them, you will feel supported at every stage of the process, from the assessment of your overall tax situation to the complete processing of your application with the Tax Agency.

In addition, they offer a personalized, agile and secure service in related matters such as visas, residence, schooling, buying a home or opening bank accounts.

As you have already seen, the well-known Beckham Law represents an excellent opportunity for foreign professionals who wish to live and work in Spain while benefiting from favorable tax treatment.