Beckham Law in Spain

The Beckham Law in Spain, also known as the "Impatriate Regime," offers foreign workers a flat tax rate of 24% on their income when relocating for employment.

Favorable Tax Rate:

The legislation permits qualifying expats to pay a fixed tax of 24% for their Spanish income of up to €600,000 per annum. Any income exceeding this level is subject to tax at 47 per cent, which coincides with the highest rate under the general tax regime in Spain​.

Exemption on Foreign Income:

Expatriates pay tax in accordance with the Beckham Law, which means they are taxed only on income generated in Spain. This implies that such foreign-source income – income from investments or businesses outside Spain – is also unable to be subject to Spanish tax during the period it is sheltered by the regime.

Duration:
Under the Beckham Law the tax advantages can last up to six years. After that duration, expats fall under the regular Spanish tax system, which taxes their worldwide income on a scale.

Eligibility:
In order to qualify for the Beckham Law a person must be working for a Spanish company or the Spanish branch of a foreign company, and must not have been tax resident in Spain during the 10 years prior to their application. Professional sportsmen were initially entitled to it but, in 2010, were excluded from the scheme.

Purpose:
The main intention of the Beckham Law was to encourage Spain to become an attractive destination for talent at a global level, particularly in areas as finance, technology and sports, increasing the competitiveness of the country internationally and promoting the economic growth.

In conclusion, the Beckham Law comes with very attractive tax savings for expats working in Spain and is a great tool for high income earners who are moving to Spain. Are you, too, going to Spain? Ask Zipple for help!