The Beckham Law in Spain was established in 2004 to promote the hiring of highly qualified executives and to make Spain more competitive in globalisation by facilitating the attraction of international talents.
Its name comes from football player David Beckham, one of its first beneficiaries. He had left England to join Real Madrid.
Subsequent modifications led to specific regulations for professional athletes, excluding them from this tax regime.
Officially known as the “regime for displaced workers” (Regimen fiscal de Impatriados), the Beckham Law is therefore a beneficial tax regime for those who meet its conditions.
It was approved by Royal Decree 5/2004 of March 5, and it is framed by Article 93 of the Spanish law of 2004.
This tax regime is optional, but a series of conditions must be met to be eligible.
Who can benefit from the Beckham Law tax regime?
The initial target
Potential beneficiaries of the Beckham Law are:
- Foreign workers recently settled in Spain.
- Executives coming to work for a Spanish company.
- High-income expatriates holding management or executive positions.
- They can be EU nationals or not.
Exclusion of top-level athletes
While the law was born following David Beckham‘s transfer to Real Madrid, top-level athletes were excluded from the beneficiaries of the Beckham Tax Law in 2010. This decision was met with criticism as it let the law create distortions in the transfer market for football players and other professional sports, making Spanish clubs more attractive to top-level international players.
Legislative amendment of 2023
In January 2023, the Bechham law in Spain was modified.
It expanded the possibility of choosing a special regime for new groups of people:
- Teleworkers.
- Entrepreneurs.
- Professionals.
- Family members (under certain conditions).
In the new regulation, there can be two figures: a principal taxpayer and associated taxpayers (spouse and children under 25 years old or disabled who moved at the same time as the principal taxpayer or before the end of the first fiscal year of application of the regime.)
If you have doubts about the Beckham Law, contact our specialists at Delaguía&Luzón directly in English.
Benefits of the Beckham Law
What exactly has the Beckham Law in Spain changed for foreigners who can benefit from it?
A fixed tax rate
Before the establishment of the Beckham Law, foreigners were taxed on their global income at a progressive rate of 19% to 45%.
In some cases, this could lead them to pay a high amount in taxes.
Since then, they have benefited from a tax regime similar to that of non-residents.
They only pay tax on their Spanish income, at a flat (thus fixed) rate of 24% up to €600,000 (47% beyond this amount since 2021).
Only income earned in Spain is taxed
One of the main advantages of Beckham’s Tax Law is that only the income earned in Spain is taxed.
With the normal regime, all global income would be subject to tax in Spain.
Wealth Tax or rather the property tax (Impuesto sobre Patrimonio) is also only paid for assets located in Spain.
For the record, properties are taxed from €700,000 (€500,000 in Catalonia).
Validity period
A foreign taxpayer can benefit from the Beckham Law only for the first six years of residence.
No obligation to present form 720
Since the Beckham Law is a regime by which the taxpayer is treated like a non-tax resident, they therefore, do not have to present Model 720 to make an overseas assets declaration.
Disadvantages of the Beckham Law
Double taxation
People choosing this tax regime are not considered residents of double taxation conventions.
A double non-taxation convention is an agreement between two countries aimed at preventing the same income from being taxed twice.
These conventions are particularly important for individuals and businesses operating in multiple countries.
They help clarify the different types of tax in Spain and prevent double taxation of income generated in a foreign country.
Deduction of expenses
In return for this fixed and reduced tax rate, expatriates under this regime generally have limited options in terms of tax deductions.
Standard deductions available to fiscal residents, such as those for real estate investments or education-related expenses, are often not available to those under the special regime of the Beckham Law.
Limited exemptions
Beneficiaries of the Beckham Law generally have access to fewer tax exemptions than usual fiscal residents.
This can affect the types of allowances that are tax-exempt, for example, severance allowances.
Consult our team of professional accounting advisors for precise and personalised advice in English.
How to apply for Beckham Law?
Once you have determined whether Beckham’s Law tax regime can be beneficial to you, you can apply to the Agencia Tributaria (the tax administration).
They should respond within a 1 to 2-month period.
Beware: in case of rejection of your application by the tax administration, it will not be possible to renew it.
No turning back either if you have already started to pay taxes without benefiting from the Beckham law.
What are the conditions to benefit from the Beckham Law tax regime?
Not having resided in Spain for the 5 years preceding the application (10 years before an amendment in 2023).
- Have a work contract with a Spanish company.
- Administrators must not hold more than 24% of the company.
- Obtain a NIE (Número de Identificación de Extranjero) if you are an EU national. To find out how to do this, read our complete article.
- Obtain a TIE, (Tarjeta de Identidad de Extranjero) if you are a non-EU national.
- Register for the Spanish Census of Liable Taxpayers (Censo Fiscal). Read this official page for more information or contact us.
- Provide proof of employment.
- Deadlines: remember that it’s necessary to respect a series of deadlines to qualify (deadline for moving to Spain, for starting work, for applying for the regime).
Advice from Delaguía&Luzón: plan your residence transfer in advance.
Contact us directly online if you need help on your expatriation, our experts will answer you in English.
How to declare income when choosing the Beckham Law?
Those who choose this regime must use Form 149 and submit a special IRPF declaration via Form 151.
Withholdings and advance payments follow the rules of the Non-Resident Income Tax (IRNR), with a flat rate of 24% on work income.
Criticism of Beckham's Law
The Beckham Law in Spain has been criticised for favouring the wealthy elite and for its lack of tax ethics.
Despite the controversies, the Beckham Law has significantly contributed to Spain’s tax attractiveness for foreign talents.
Take advantage and benefit from the Beckham Law in Spain
If you are a foreigner and planning to settle in Spain to work, you should check if you are entitled to benefit from the regime for displaced workers.
It could be a game-changer.
FAQ on the Beckham Law
The regime for displaced workers was nicknamed the Beckham Law because David Beckham was one of its first beneficiaries following his transfer from Manchester United, in England, to Real Madrid, in Spain.
The Beckham Law, or Regimen fiscal de Impatriados, is a special tax regime in Spain designed to attract highly qualified executives and facilitate the attraction of international talents. Potential beneficiaries include foreign workers recently settled in Spain, executives working for a Spanish company, and high-income expatriates holding management or executive positions, regardless of nationality (EU or non-EU).
Yes, since January 2023, the spouses and children of the taxpayer benefiting from Beckham’s Law can also enjoy this tax regime.
Top-level athletes were excluded from the beneficiaries of the Beckham Law in 2010. This decision was made to avoid distortions in the transfer market of football players and other professional sports, with Spanish clubs becoming too attractive for top-level international players due to the tax advantages of the law.
Expatriates benefiting from the Beckham Law pay tax on their Spanish income at a flat rate of 24% up to €600,000 (47% beyond this amount since 2021) and are only taxed on income earned in Spain, not on global income. Property tax only concerns assets located in Spain.
A foreign taxpayer can benefit from the Beckham Law only for the first six years of their residence in Spain.
To benefit from the Beckham Law tax regime, conditions include not having resided in Spain for the 5 years preceding the application (since 2023), working for a Spanish company, obtaining a NIE (for EU nationals) or a TIE (for non-EU nationals), and registering for the tax census.
Under the Beckham Law, taxpayers must use form 149 for the application and submit a special IRPF declaration via form 151, with a withholding rate of 24% on work income following the rules of the Non-Resident Income Tax (IRNR).
Glossary
- Artículo 93 de la ley española de 2004: Article of the Spanish law that frames the Beckham Law, defining the conditions and rules of this special tax regime.
- Censo Fiscal: Spanish Census of Liable Taxpayers, which beneficiaries of the Beckham Law must register for.
- Impuesto sobre la Renta de no Residentes (IRNR): Non-Resident Income Tax. Beneficiaries of the Beckham Law pay their taxes according to the rules of this tax, with a fixed withholding rate on their work income.
- Modelo 149: Form used by beneficiaries of the Beckham Law to initiate their request with the Agencia Tributaria (Spanish tax administration).
- Modelo 151: Special IRPF (Personal Income Tax) declaration form for those who opt for the Beckham Law regime.
- Modelo 720: Declaration form for assets abroad. Beneficiaries of the Beckham Law are not required to present it, as they are treated as non-tax residents in this regard.
- NIE (Número de Identificación de Extranjero): Identification number for foreigners, required for EU nationals who wish to benefit from the Beckham Law.
- Real Decreto 5/2004: Royal Decree that approved the Beckham Law, dated March 5, 2004, establishing the legal framework of the regime for displaced workers.
- Regimen fiscal de Impatriados: Official term for the Beckham Law, which is the tax regime for displaced workers in Spain.
- TIE (Tarjeta de Identidad de Extranjero): Identity card for foreigners, necessary for non-EU nationals wishing to benefit from the Beckham Law.
