Applying For Beckham Law Spain: A Comprehensive Guide

The Beckham Law, also known as the Special Regime for Displaced Workers, is a special tax regime for expats in Spain. It allows foreigners who have moved to Spain for work to pay a flat rate of 24% on incomes up to €600,000, instead of a progressive tax on their worldwide income (19-45%). The Beckham Law was created to attract talent and qualified workers to Spain and was named after footballer David Beckham, who was one of the first to benefit from it when he joined Real Madrid.

To apply for the Beckham Law, you must first obtain a digital certificate to complete the process online. Then, you need to:

1. Download and submit form 030 to the Spanish Tax Authorities.

2. Once approved, access and fill in form 149 on the Spanish Tax Entity website.

3. Upload complementary documentation, including proof of employment and your Social Security registration.

4. Check the status of your application.

Who is eligible for the Beckham Law?

The Beckham Law in Spain offers a special tax regime for foreign workers, allowing them to be taxed at a flat rate of 24% on their income, instead of the progressive tax rate of up to 50% applicable to residents. This law was created to incentivize foreign talent and investment in Spain, and anyone eligible can benefit from this law for up to 6 years.

To be eligible for the Beckham Law, you must meet the following requirements:

• You must not have been a tax resident in Spain for the last 5 or 10 years. This means you cannot have resided in Spain during this time and cannot have any economic or vital interests in the country.
• You must be relocating to Spain for work purposes. This could include:
• Having received a job offer from a Spanish company, for example, as a highly qualified worker.
• Being transferred to a Spanish entity by your current foreign employer.
• Working remotely for a foreign company.
• Becoming the administrator of a Spanish company, as long as you do not own more than 25% of its shares.
• Coming to Spain to pursue an entrepreneurial activity with a favorable report from ENISA.
• Providing services or R&D training to start-ups and emerging companies as a highly qualified worker, with at least 40% of your income coming from these activities.
• All work responsibilities must be performed in Spain. If any part of your work is performed abroad, it cannot represent more than 15% of your total activity.
• You must not be earning income that would be considered permanent establishment income in Spain. This means you cannot be self-employed or a freelancer.
• You must apply for this regime within 6 months of starting your employment in Spain.
• You must hold a residence permit for remote work (digital nomad visa) and be an employee of a company based abroad.
• You can also be a family member of a foreigner with a residence permit as a digital nomad, such as a spouse, dependent children, or parents.

It is important to note that freelancers, self-employed workers, and professional athletes are not eligible for the Beckham Law. Additionally, company directors with ownership exceeding 25% are also excluded unless their company is not classified as asset-managing or they apply under a startup/entrepreneur visa.

What are the requirements?

To be eligible for the Beckham Law, you must meet the following requirements:

• You must not have resided in Spain during the past 5 to 10 years prior to your move.
• You must be moving to Spain for work-related reasons. This can include:
• Having received a job offer from a Spanish company, for example, as a highly qualified worker.
• Coming to Spain to pursue an economic activity classified as an entrepreneurial activity (you will need a favorable report from ENISA).
• Coming to Spain to work remotely for a company as a digital nomad.
• Becoming the administrator of a Spanish company, provided you do not own more than 25% of its shares.
• Carrying out training or R&D activities (research, development, or innovation).
• Your work in Spain should be the primary source of your professional activity. Any income classified as obtained through a permanent establishment in Spain is not permitted.
• You must apply for the Beckham Law within 6 months of either registering with Social Security or arriving in Spain, whichever comes first.
• You must be considered a tax resident in Spain. This can be achieved by:
• Staying in Spain for more than 183 days during the calendar year.
• Having your main nucleus or base of activities or economic interests in Spain.
• Having your legally non-separated spouse and/or dependent minor children residing in Spain.

It is important to note that the requirements for the Beckham Law may be subject to interpretation, and any errors or omissions in the application process can lead to rejection. Therefore, it is recommended to seek legal assistance to ensure a smooth and successful application.

How do I apply?

To apply for the Beckham Law, you must submit an application to the Spanish Tax Agency. This involves a few steps:

Step 1: Get a digital certificate

Before starting the procedure, you will need to obtain a digital certificate to be able to complete the process online.

Step 2: Download and submit form 030

Download form 030 here. This form registers you as a fiscal resident and allocates a tax identification number (NIE) with the Spanish tax authorities. Submit it to the Spanish Tax Agency, which can be done online.

Step 3: Receive approval and submit form 149

Once you receive approval from the Spanish Tax Authorities, you will need to submit another application form, form 149. This form can be accessed on the Spanish Tax Entity website. You will need to select "All procedures", then "Taxes, feed, and property benefits", followed by "Personal Income Tax", and finally, form 149.

Step 4: Submit complementary documentation

Along with form 149, you will need to include your passport, NIE number, employment contract, and social security number.

Step 5: Receive final acceptance

Within a period of 10 days, or up to 1-2 months, you will receive the final acceptance, along with a certificate that you must hand to your company so they can start applying the tax rate deduction.

Step 6: Annual declaration

Every year, from April to June, you will need to file your income tax return using form 151.

What are the tax benefits?

The Beckham Law in Spain offers a range of tax benefits for eligible expats. Here are the key tax advantages:

• Reduced flat tax rate: The law allows for a reduced flat tax rate of 24% on income up to €600,000, compared to the standard progressive tax rates of up to 45% or even 54% in some regions. This can result in significant tax savings, especially for high-earning individuals.
• Taxation on Spanish-sourced income only: Under this regime, expats are only taxed on their income generated within Spain, excluding foreign-sourced income such as rental income, dividends, interest, and capital gains accrued outside the country. This can lead to substantial tax savings for those with diverse international income streams.
• Limited wealth tax obligations: The wealth tax only applies to assets located in Spain, and the tax rate varies from 0.2% to 2.5%. This means that expats with assets outside the country do not have to pay wealth tax on their global wealth.
• No need to file Modelo 720: Expats benefiting from the Beckham Law are exempt from filing the Modelo 720, which is a declaration of overseas assets. This simplifies tax compliance and helps preserve privacy.
• Benefits extended to family members: The tax benefits under the Beckham Law extend to the expat's spouse and dependent children under 25, creating potential tax savings for the entire family.
• Exemption from the Solidarity Tax for non-residents: Beneficiaries of the Beckham Law are exempt from the Solidarity Tax, which is applicable only to Spanish assets.
• Eligibility for employees of foreign companies: As of 2023, amendments to the law allow expats employed by foreign companies to also benefit from this regime, making it more inclusive.

These tax benefits can provide substantial financial incentives for high-earning expatriates relocating to Spain, making the country an attractive destination for global professionals. However, it's important to note that the Beckham Law does not exempt capital gains and investment incomes sourced in Spain from taxation. These are still subject to taxes at rates between 19% and 28%.

What are the drawbacks?

The Beckham Law, while offering significant tax advantages, has certain limitations that should be considered:

• Ineligibility for double taxation agreements: Those benefiting from the Beckham Law cannot benefit from double taxation agreements that Spain may have with other countries, which may result in less favourable tax treatment on foreign income. This is a complex issue, as some countries' double taxation agreements may work in tandem with the Beckham Law, while others may not.
• Benefits are most advantageous for high earners: The flat tax rate of 24% without the possibility of applying for personal or family deductions may be less beneficial for lower-income earners. Expatriates earning below the threshold may find the standard progressive tax system more beneficial due to personal allowances and deductions.
• Income cap: There is a cap on the income subject to the reduced rate; earnings above €600,000 are taxed at a higher rate of 45% or 48%, which may reduce the attractiveness of the Beckham Law for very high-income individuals.
• Limited eligibility: The Beckham Law is not applicable to all expatriates; certain professionals, such as athletes, freelancers, and self-employed individuals, are excluded from its benefits.
• Potential for misuse: Critics argue that the Beckham Law provides a legal avenue for high-income individuals to significantly reduce their tax payments, which some view as unfair and contributing to wealth disparities in Spain.
• Economic instability: By lowering tax rates for high earners, the government may be forgoing a potential source of revenue that could be used to fund public services and stimulate economic growth.
• Bureaucratic burden: Beneficiaries of the Beckham Law must comply with Spain's strict legal and fiscal rules, which can add to their administrative burden.
• Strict application process: The application process for the Beckham Law is stringent, with a limited application window of six months from either registering with Social Security or arriving in Spain. Missing this deadline will result in automatic rejection.

Frequently asked questions