The Beckham Law is a special tax regime in Spain designed to attract high-level professionals and international entrepreneurs by offering favorable tax conditions. This regime was introduced in 2005 and took its name from the footballer David Beckham, who was among the first to benefit from these tax advantages upon moving to Real Madrid. The law was originally implemented to encourage the arrival of international talent and improve Spain’s competitiveness as a professional destination.
Origin and Evolution of the Beckham Law
Since its inception, the Beckham Law has allowed foreign workers to be taxed as non-residents, applying a flat rate of 24% on their employment income earned in Spain, without considering worldwide income. This approach incentivized the arrival of executives and athletes, though over time, criticism led to adjustments, such as the exclusion of elite athletes in 2010.
Recent Updates
Nearly two decades after its initial approval, the Beckham Law underwent significant updates with the Start-Ups Law (Law 28/2022) and Royal Decree 1008/2023. These reforms modernized and expanded the circumstances under which the regime can be accessed, adapting to the current business and technological environment.
Requirements to Qualify for the Beckham Law
Residence and Relocation
To benefit from this regime, certain criteria must be met. The applicant must not have resided in Spain during the five years prior to relocation (previously, the requirement was ten years).
Eligibility Conditions
The conditions to access the regime include:
- Having a work contract in Spain or an assignment letter in the case of expatriates.
- Being appointed as an administrator of a non-related company (or a related one as long as it is not a holding company).
- Engaging in an economic activity considered as entrepreneurship in Spain.
- Being a highly qualified professional providing services to start-ups or participating in R&D&I activities, with compensation representing more than 40% of their total income.
An important detail is that the regime requires applicants not to earn income through a permanent establishment in Spain, except in cases related to entrepreneurial activities.
Tax Advantages of the Beckham Law
Tax Rate and Employment Income
Beneficiaries are taxed under the rules of the Non-Resident Income Tax (IRNR), meaning that their employment and business income is considered generated in Spain, subject to a flat rate of 24% for the first 600,000 euros and 47% for amounts exceeding that threshold. Savings income is taxed on a progressive scale ranging from 19% to 28%.
Exemptions and Additional Benefits
Certain exemptions apply to in-kind income, such as medical insurance and food allowances. However, some exemptions available to non-tax residents, such as severance payments or participation in investment funds, are not applicable under this regime.
Asset-Related Aspects and Reporting Obligations
Beyond income tax, the Beckham Law also addresses how taxpayers must declare in the Wealth Tax (IP) and the Temporary Solidarity Tax on Large Fortunes (ITSGF). In these cases, taxation is on a real obligation basis, meaning that only assets located in Spain are subject to tax. Beneficiaries of this regime are also not required to submit informational models 720 and 721, which simplifies administrative management.
How to Qualify for the Beckham Law?
In summary, the Beckham Law has served as a driver for attracting talent and human capital to Spain by offering a competitive tax framework. Recent reforms have updated and expanded access conditions, enhancing its appeal for new professional profiles and entrepreneurs. If you’re interested in learning more about how to qualify for this regime, please visit our advice for non-residents page.