SPAIN’S BECKHAM LAW

Tax regime to non-resident individual moving to Spain due to employment

contract

 The “Beckham Law/rule” is a Spanish tax law that was passed in 2005 to offer advantageous
personal tax regime to non-resident individuals moving to Spain due to employment contract.
This regime allows non-residents who acquire tax residence in Spain to continue paying taxes
under the non-resident income tax, which means they will only be taxed on income they earn
in Spain1.
 The law gained its nickname after football player David Beckham became one of the first
foreigners to take advantage of it.
 The expat would be subject to a flat 24% tax rate, rather than the taxation rates applicable to
Spanish residents. If taxed as a resident, the expat would be subject to a progressive tax scale
ranging from 15% to 43· depending on their level of income.
 Employees2 eligible for the Special Tax Regime will require the following requirements:
1) That they have not resided in Spain during the ten tax periods prior to the one in which
they are moving into Spanish territory.
2) That the displacement to Spanish territory occurs as a result of any of the following
circumstances:
- As a result of an employment contract. This condition shall be considered fulfilled
when an employment relationship with an employer in Spain begins or a Spanish
branch of a foreign entity, or when the displacement is ordered by the employer and
there is a letter of displacement from it.
- As a result of the acquisition of the status of administrator of an entity in whose capital
does not participate or, in the contrary case, when the participation in the same does
not determine the consideration of a linked entity.
*In any case, the must be a causal relationship between move to Spain and the
beginning of the employment relationship, so that the extended period of time
between two moment may be an indication, among other factors to be considered,
that there is no relationship of causality, therefore, the option for taxation by the non-
resident is not applied (CV 2777-16, 21-06-16).

1Any foreign worker remaining in the country over 183 days in a tax year was deed to be “tax resident” which meant they
were liable for Spanish taxes on their worldwide income, not just their Spanish source income and assets.

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The special tax regime does not extend to family members who can accompany the displaced employee to
Spanish territory.
 3) That does not obtain income that would be qualified as obtained through a permanent
establishment located in Spanish territory.
 This exemption applies in the year of arrival and for the following 5 tax years, for a total of
six years.
 The Tax Regime:
1. The incoming professional will be tax resident in Spain but will be taxed as a non-resident.
For the first €600.000 of Spanish-source income, the special tax rate is 24%. The tax on
mounts in excess of €600.000 is 45%.
2. For saving income, including interest, dividends and capital gains obtained in Spain, the
tax rate is 19% for the first €6.000, 21% form 6.000 to €50.000, and 23% for amounts in
excess of €50.000.
Only Spanish-source income is subject to taxation, for example, for assets and rights
located or exercisable in Spanish territory, subject to the Spanish Wealth Tax. Other
income or gains obtained outside of Spain would not be subject to Spanish taxation.
 The application is submitted on Form 149 within a maximum period of a six months from the
start date of the activity. It should be accompanied by:
a) Personal identification;
b) The labor contract or a secondment letter, whichever is applicable.
c) A social security registration certificate; and
d) Any other documents that prove the accomplishment of the legal requirements.
*The Tax Agency has ten business days to answer.

 The displaced person who applies the special tax regime is no obliged to comply with the
informative declaration on assets outside Spain, form 720 (CV 16-01-14).

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Questions:
1. Since when are you in Spain?
2. Have you come to Spain for a work contract?
3. It is important that you know that to apply the Beckham rule there must be a causality
between displacement and work.
If you come to Spain to look for work, this special regime cannot be applied.
4. Do you have any contract with the company regarding your relocation to Spain? In other
words,
5. When did you start to woerk?
6. We need to be able to complete form 149 the following documents:
- The employment contract
- Census certificate
- Preliminary agreement of work collaboration
- The registration of social security