What Is the Beckham Law in Spain and How Does It Work for Expats?
In this FAQ section by Accompany, we explain everything you need to know about the Beckham Law in Spain, from its legal framework and eligibility requirements to the key tax advantages that make it an attractive option for foreign professionals, executives and investors relocating to the country.
Whether you are exploring how to apply for the Beckham Regime in Spain or assessing if this special expat tax regime is the right choice for your situation, understanding the conditions, timelines and administrative steps is essential.
We also break down how the Spanish expat tax system works under this regime, including the flat tax rate, treatment of worldwide income, and key differences compared to standard Personal Income Tax (IRPF), helping you clearly evaluate your options.
From eligibility criteria and application procedures to the real tax savings and potential limitations, this guide provides a clear roadmap to help you make informed, compliant and strategic decisions when moving to Spain.
History and Evolution of the Beckham Law in Spain: Key Changes and Updates
The special tax regime was introduced in 2003 as an incentive measure to attract highly qualified foreign workers to Spain. In exchange for coming to Spain, they were offered better tax conditions. These conditions consisted essentially in giving them the option of being treated in terms of taxes as non-residents. Being taxed as a non-resident normally means lower tax rates and being taxed only on income generated in Spanish territory. Spain was not the only country to offer this special regime, in fact, there were other countries in Europe that were already doing the same.
The expression “Beckham Law” has its origin in a well-known English footballer who used to play for Real Madrid C.F., one of the most important football teams in the world. The regime is commonly known as the “Beckham Law” because it coincided in time of his arrival in Spain and at the time it was rumoured that the regime was specifically designed to facilitate the operation.
After that, in 2010, the tax benefit was limited, meaning that only taxpayers whose income did not exceed €600.000 could apply the special tax regime. Bearing in mind that those years were quite difficult due to the economic crisis, this measure had a propagandistic rather than a tax collection purpose. Moreover, the aim was to send the message that celebrities had to set an example when it came to contributing to the sustainability of public expenditure.
In 2015 professional athletes were expressly expelled from the regime and the limit of €600.000 was eliminated. This way, those with incomes above this amount can also apply the regime, but with a tax rate of 47% for the part of income exceeding the threshold. Finally, in 2023, eligibilty was extended to include directors of limited companies, entrepreneurs creating innovative companies, digital nomads and direct family members.
Key Features of the Beckham Regime: Tax Rates, Income Treatment, and Main Benefits
The special expats tax regime is a special tax regime by which you could be taxed similarly to non-residents, which essentially means lower tax rates and being taxed only on income generated in Spain.
The main advantage of the SETR is that the general tax base (which includes employment income, rents, etc.) is taxed at an almost fixed rate. This means that the first 600,000 euros of income is taxed at 24% and the excess is taxed at 47%. On the other hand, if the SETR were not applied, the same general tax base would be taxed at a progressive tax rate, a rate that can reach up to 49% depending on the region of residence.
Another advantage of the special expats tax regime is that only income obtained in Spain, i.e. income of Spanish origin, is taxed. There is only one exception, employment income. With the regular PIT, all your worldwide income would be subject to taxation in Spain.
Advantages and Disadvantages of the Beckham Law: Is It Worth It for Foreign Taxpayers?
The fact is that the semi-fixed tax rate could be beneficial if the volume of income included in the general tax base is high, but counterproductive if it is low. The reason is that PIT tax rates can even be 0% for low-income taxpayers. As income grows, so do tax rates. It is not easy to say where the threshold lies between the two regimes because the tax rates applicable with PIT depend on each autonomous community. For example, Madrid has different tax rates than Barcelona. However, and only to give a general idea, the threshold is usually between 35,000 and 50,000 euros of income (in the general tax base). In other words, it is generally better to choose PIT if you receive income below these amounts, while the SETR would be better if you received higher income.
In addition to the general tax base, there is also the capital gain tax base. The latter includes various types of income such as dividends, interest or other capital gains obtained from the transfer of assets (real estate, shares, etc.). These incomes are taxed at the same rates regardless of whether SETR or PIT is applied, with a progressive tax rate of 19% to 26%.
If you were applying regular PIT, you would pay taxes in Spain for all your worldwide income. Precisely one of the benefits of the Beckham Law is that only local income obtained in Spain is taxed. There is only one exception to this last rule, employment income. With the SETR, your worldwide employment income is taxed in Spain.
This does not necessarily mean that you will pay income tax twice for the same income (in the country where you generated the income and in Spain). This is because there is a mechanism to avoid double taxation whereby the amount of taxes paid abroad can be used as a tax credit in Spain.
The good thing about SETR is that you would not have to pay taxes in Spain on other income generated abroad, such as rental income, dividends, interest, capital gains, etc. You would only have to pay taxes on those types of income in the country in which they are generated, if any, but not in Spain.
Another of the benefits of the Beckham Law is that you would only have to pay wealth tax in Spain, if applicable, on assets located in Spain. If you were subject to PIT like any other tax resident in Spain, then you would have to pay, if applicable, Wealth Tax on all your assets, regardless of whether they are in Spain or not.
Wealth Tax is a tax paid on the net value of your assets (real estate, stocks and other securities, money in current accounts, life insurance, etc.). This type of tax is not so widespread around the world, but Spain is one of the countries where it exists. It is a progressive tax, that is, the greater the wealth, the higher the tax rate. Depending on the autonomous community of residence, the tax rate can reach 3.75%.
There is no obligation to file the Form 720, an annual information declaration on assets held abroad. This does not affect your tax burden, but it is one of the benefits of the Beckham Law. The point is that if the SETR is applied instead of the regular PIT, there is no obligation to file the informative declaration of assets abroad. This obligation is met by filing the Form 720.
The Spanish government introduced the Form 720 in 2012, to reduce international tax evasion practices. The form must be filed annually by all tax residents in Spain who have assets located abroad. Specifically, for those whose assets are valued at more than 50,000 euros for each type of asset. In other words, more than €50,000 in real estate, more than €50,000 in shares, etc.
It is just an informative statement, which means that no amount would result. However, if the form is not filed, or is filed incorrectly, the penalties can be significant. Add to this the considerable degree of detail required in the form and, therefore, the significant workload involved each year.
Limitation of PIT tax benefits. Being taxed as a non-resident implies that the tax quote is calculated in accordance with the Non-Resident Income Tax Act instead of the standard PIT rules. Because of the foregoing, not all the tax benefits provided for regular PIT are applicable. Below is a list of some of the most common tax benefits:
- Exemption from the deemed income attributed to the permanent residence
- Tax benefits if you live with minor children and/or elder parents
- Tax reliefs if you receive home rental income
- Tax deductions in the case of physical or mental disability.
- Some Double Taxation Agreements (DTA) are not compatible with the SETR.
The SETR allows you to apply for a Certificate of Tax Residence in Spain, which is the way to prove in other countries that you are a tax resident in Spain. In fact, you will need this certificate to request the tax benefits provided in a specific DTA.
However, some DTA’s (such as the one between the United Kingdom and Spain) specifically exclude the application of their provisions when the taxpayer applies the SETR. This could have significant consequences depending on your circumstances (what type of income you obtain and where you generate it), and you may be taxed twice for the same income.
One of the advantages of PIT is that, if a series of requirements are met, employment income obtained abroad could be exempt of taxation in Spain. The requirements are quite strict. For example, that the work is carried out for a foreign company, that there is equivalent PIT in that country, that the work is carried out abroad, etc. However, this possibility does not exist if the SETR is applied.
Since the analysis to determine whether the SETR is more beneficial than the PIT in your case can be complex, our tax lawyers will be happy to find the most beneficial solution for you.
How to Apply for the Beckham Law in Spain: Requirements, Eligibility, and Process
Applying for the Beckham Law in Spain (Special Expat Tax Regime) requires meeting specific eligibility criteria and following a structured process. This regime is designed for individuals relocating to Spain for work purposes and becoming Spanish tax residents.
To qualify for the Beckham Regime Spain, you must meet the following key requirements:
- Become a tax resident in Spain, typically by spending more than 183 days in the country during the calendar year.
- Relocate to Spain for work-related reasons, such as starting a new employment contract, being transferred by a foreign employer, or being appointed as a company director.
- Not have been a Spanish tax resident in the previous 10 years.
- Not carry out economic activity through a permanent establishment in Spain, meaning you cannot operate as a self-employed individual with a fixed place of business.
Once these conditions are met, the application process for the Beckham Law Spain generally involves submitting the relevant form (Modelo 149) to the Spanish Tax Agency within 6 months from the start of your employment in Spain.
Understanding the Beckham Law requirements in Spain and applying within the correct timeframe is essential to benefit from this regime and avoid losing eligibility.
What to Consider Before Applying for the Beckham Law in Spain
Depending on your circumstances, the analysis to determine if you meet all the requirements of the Beckham Law can be complex. Contact us for further details and support.
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