Non-resident taxpayers who move to Spanish territory and who, as a result of this move, acquire tax residence in Spain, may opt to be taxed under the special regime for posted workers, better known as the Beckham Law.
Broadly speaking, the regime allows the taxpayer to apply a territorial criterion for tax purposes for a period of 6 years (the year of the change of residence and the following five years). This means that, with some limited exceptions (such as income from employment and activities considered to be entrepreneurial), the taxpayer will only pay personal income tax (IRPF) and wealth tax on income from Spanish sources and on assets located in Spain.
The Beckham Law has the following characteristics:
I. Conditions for access to the regime.
Taxpayers who fulfil the following conditions may opt to be taxed under this regime:
1. They must not have been resident in Spain during the five tax periods preceding the one in which they move to Spain.
2. The move to Spain must be the result of:
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- A work contract (taking up employment with a Spanish employer). This condition is also met if:
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- The move is ordered by the employer and there is a letter of transfer.
- The move is not ordered by the employer, but the work is carried out remotely, using only technological, telematic and communication systems (digital nomads).
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- Becoming director of a company. The taxpayer may have a share in the company of which he becomes a director, but if it is an asset-holding company, this share must be less than 25%.
- Carrying out an economic activity in Spain as a self-employed person, classified as entrepreneurial.
- Carrying out an economic activity as a highly qualified professional providing services to start-up companies or carrying out training, development and innovation activities.
3. The taxpayer must not receive any income that would be classified as income derived through a permanent establishment (except in the case of entrepreneurial activities or activities carried out by highly qualified professionals).
II. Content of the regime.
Taxpayers who opt for the Beckham Law will be taxed as tax residents in Spain, with the following key features:
- Personal Income Tax (IRPF):
- Only income from Spanish sources is taxed, the only exceptions being income from employment and income from activities deemed to be entrepreneurial, which are taxed in Spain regardless of where they are earned.
- Income from activities carried out before moving to Spain is not taxed in Spain.
- A fixed rate of 24% applies to the first EUR 600,000 of the general tax base (active income).
- Wealth tax:
- Only assets located in Spain and rights exercisable in Spain are taxed.
III. Opting for the regime.
In order to opt for this regime, a notification must be sent to the tax authorities within six months of the start of the activity, as indicated in the Spanish Social Security registration or in the documentation allowing compliance with the social security legislation of the country of origin.
IV. Family members.
Under certain conditions, the special regime may be extended to the family members of the expatriate (spouse and children under 25 years of age or of any age if they are legally incapacitated).
We at Bové Montero remain at your complete disposal for any questions or concerns you may have in relation to this or any other matter.
