Are you a foreigner and will you come to work in Spain? Do you know that you can take advantage of various tax benefits if you meet a series of requirements?

In today’s article, we tell you what the so-called Beckham Law consists of, what tax advantages it provides, what form you must present to benefit from it and what requirements must be met.

What is the Beckham law?

With the name Beckham Law, we refer to the special tax regime for expatriates that appeared in 2003 and consisted of foreigners who come to live in Spain can take advantage of an IRPF tax of 24% on their income instead of applying progressive taxation with percentages from 19% to 45% on global income obtained.

The goal of the Beckham Law is to attract foreign talent to Spain, and its name is due to the footballer David Beckham who was the first to benefit from the special regime.

Beckham Law: requirements that must be met to apply for the tax benefits

The requirements relating to applying the Beckham Law are established in article 93 of the Personal Income Tax Law, which regulates the special tax regime applicable to workers displaced to Spanish territory. These requirements are as follows:

  • Those who want to join the regime have not been residents in Spain during the last 10 tax periods before the one in which the move to Spanish territory occurred.
  • That the displacement to Spanish territory occurs as a result of any of the following circumstances:
    • An employment contract.
    • The acquisition of the administrator condition of an entity in whose capital is not a participant.
  • They do not obtain income that would qualify as obtained through a permanent establishment in Spanish territory.

Form 149 and Beckham Law

Form 149 must be used to benefit from the Beckham Law, and it will also be used to resign or to formalise the exclusion. The presentation of Form 149 is done through an electronic certificate. The deadline for submission is six months from the worker’s registration with Social Security or from the date that appears on the document that allows the worker to remain under the protection of the Social Security of their country of origin. If the period above six months is not met, the application to benefit from the regime will be denied.

The following information must be included in Form 149:

  • Identification of the contracting company (company name, address and NIF)
  • Employee identification (full name, address and NIF).
  • Start date of the employment relationship.
  • Certificate from the contracting company regarding the existence of the employment relationship or letter from the foreign company ordering the transfer. Said certificate must indicate the start date of the employment relationship, the address of the work centre where the worker will be, and the duration of the contract.

Within ten days from the presentation of Form 149 and all the attached documents that we have detailed to benefit from the Beckham Law, the AEAT will issue a document certifying that the employee has opted for the special regime.

Tax advantages of the Beckham Law

The tax advantages of the Beckham Law for those foreign workers who move to Spain are the following:

  • Personal Income Tax (IRPF). As we said before, the income these workers receive in Spain will be taxed at a fixed rate of 24% up to 600,000 euros. If this amount is exceeded, it will be taxed by 47%. However, we cannot forget that benefits such as the exemption in amounts received for dismissal or any other that is not provided for in the Non-Resident Income Tax cannot be applied.
  • Wealth Tax. In wealth tax, the advantage of the Beckham law is that they will only have to pay taxes on the goods and rights they own in Spain.
  • Beckham Law and Form 720. About the declaration of assets and rights located abroad (Form 720 Spain), there is no obligation to present it during the years in which the special regime of the Beckham Law is applied.
  • Inheritance tax and donations. If the person to whom the special regime is applied is named heir in Spain, they must declare the Inheritance Tax in the autonomous community in which they reside.
  • Income obtained in other countries. It will not be necessary to pay taxes in Spain for the income obtained abroad, and it will only be taxed for those obtained in Spanish territory.

Who can benefit from the Beckham Law?

In general, any person who travels to Spain to live and work in the country, and meets the requirements we have detailed above, may benefit from the Beckham Law.

In particular, they usually benefit from the Beckham Law:

  • Foreign workers who work in Spain are hired by a Spanish company or posted by their own foreign company to work at its headquarters in Spain.
  • People appointed administrators of a commercial company must move to Spain to manage the company.
  • Those people who move to Spain and who have high incomes or hold a managerial or management position in a company.

On the other hand, the following will not be eligible for the Beckham Law:

  • Self-employed or self-employed workers.
  • Professional athletes.

You must remember that you will be able to benefit from all the advantages that we have seen for five years. To find out if you can take advantage of the Beckham Law in Spain, you must have the advice and help of a tax advisor who knows the applicable legislation in depth and studies your case to see if you meet the legal requirements and request registration in the regime—using the appropriate form.

If you need the help of a tax advisor in the Beckham Law, do not hesitate to contact our team.

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