The Beckham Law And Its Advantages

The Beckham Law makes it easier for talent from other countries to settle in Spain. The standard was approved in 2003, and although with modifications, it offers a wide variety of advantages. All foreign workers can rely on it, but it is necessary to know how to do it. Here are the most important details to consider.

What advantages does the law offer?

The special tax regime for expatriates (SETR), the law’s real name, allows workers from abroad to pay taxes as non-residents. These people would pay 24% of their income as personal income tax, so they are not subject to the conventional norm. In this way, attractive conditions are created to attract talent and highly qualified profiles from abroad.

The most important advantage of the law is the fiscal one. The rate to be paid is fixed unless it exceeds 600,000 euros per year, which would be taxed at 45%. The person affected by the law will enjoy this situation for five years.

Along with this, taxation is only applied on profits obtained in Spain, which leaves those obtained in other parts of the world free. Thus, we can easily diversify our income, although the tax laws of each country must always be respected.

The regulation also affects the wealth tax. This applies only to possessions held in Spain. Once again, the diversification of the affected person is promoted, who can choose to seek the most beneficial taxation in each country.

How to protect yourself under this law?

The law protects foreign workers who have recently arrived in the country (except for the special employment relationship of professional athletes) and those displaced to the country as a result of acquiring the status of the administrator of an entity in whose capital they do not participate or, in the event On the contrary, when participation in it does not determine the consideration of a related entity in the terms provided in article 18 of the Corporation Tax Law. In addition, various requirements must be met, such as not having resided in Spain for the last 10 years and having a contract formalized with a Spanish company to verify that we are moving for work reasons.

To benefit from this law, we must submit an application after registering with Social Security, and we will have six months to complete the process. Form 149 will have to be filled in to inform the Tax Agency. The DNI, Social Security number and the employment contract will be included.

Once the procedures have been completed, the affected party will enjoy the benefits of the law for the next five fiscal years. At the end of each one of them, we will have to present the tax return of non-residents, a procedure that is carried out through form 151. Of course, if there were errors or the documents were not adequate, the administration could deny the application.

In short, the Beckham Law is a bid to attract foreign talent through tax benefits. A regulation that makes it easier to start a new life in the country. In this way, many professionals with high job profiles can find Spain as an attractive destination.