Any person considered a tax resident in Spain would be subject to the Personal Income Tax (IRPF). Notwithstanding the preceding, there is a special regime (popularly known as the Beckham Law) for new residents in Spain or expatriates. These people displaced for work reasons can transfer their residence to pay taxes as if they were non-residents. The regime will be applicable during the same year of arrival and the next five following years.

The purpose of creating the continuous reference tax regime is to encourage the hiring of highly qualified personnel in Spain and encourage and encourage the attraction of talent through the application of a more favourable tax regime during the first years of residence.

The inclusion of new residents in this tax regime will determine that they only pay taxes on the income obtained in Spain during the calendar year. The income they may have received abroad (e.g. rental income from foreign real estate, dividends or capital gains outside of Spain) should not be declared. The following tables will apply to the income received in Spain.

For returns related to dividends, interest on the transfer of capital or capital gains derived from transfers:

Payable base Full fee Rest of the taxable base Percentage
€ 0 € 0 € 6,000 19%
€ 6,000 € 1,140 € 44,000 21%
€ 50,000 € 10,380 € 150,000 23%
€ 200,000 € 44,880 Onwards 26%

Rest of income received:

Payable base Percentage
Up to € 600,000 24%
Onwards 47%

To apply the tax regime, new workers posted to Spain must meet the following requirements:

  • Not having been a resident in Spain during the ten years before the transfer.
  • The reason for the transfer must be:
    • By the beginning of a labour relationship or displacement ordered by the employer; or,
    • When the condition of Administrator of an entity that does not participate in the capital stock is acquired.
  • Income cannot be understood as being received through a permanent establishment.

The option to benefit from the special regime must be expressly communicated to the Tax Administration through Form 149 and within six months from the start of the activity. After this period, it will not be possible to benefit from the special regime for expatriates. Those who have decided to apply the reference regime will present their returns through Form 151 within the general income tax filing period.

Do not hesitate to contact our tax department team for advice.

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