The “Beckham” Law Explained

Normally, when someone becomes a tax resident in Spain, their income is subject to Spanish Personal Income Tax (“PIT”) or Impuesto sobre la Renta de las Personas Físicas («IRPF») in Spanish. In other words, they are taxed in the same way as any other resident in Spain. This means that income coming from employment will be subject to progressive tax rates of up to 49%.


The Beckham Law, or Special Expats’ Tax Regime (“SETR”) or, in Spanish, Régimen Especial para Trabajadores Desplazados, exists as an initiative for qualified workers to move to Spain to work and become tax residents in Spain. The special expats tax regime gives those who have moved to Spain the option of paying tax as non-residents for up to 6 years. This means that their income from employment is taxed at a fixed rate of 24% up to 600,000 euros of income (and 45% above) and only sources of income from employment are taxed, not other kinds of income elsewhere in the world as is usual.


The special expats 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 point is that this regime is commonly known as the “Beckham Law” because it coincided in time with David Beckham’s arrival in Spain. It is rumoured that he was one of the first celebrities to benefit from the special scheme for posted workers.

After that, in 2010, the tax benefit was limited, meaning that only taxpayers whose income did not exceed 600,000 euros could apply the special tax regime. Bearing in mind that those years were quite difficult due to the economic crisis, it is quite likely that this measure had a propagandistic rather than a tax collection purpose. Moreover, it is likely that 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.

The last major change was in 2015, when professional athletes were expressly expelled from the regime. Notwithstanding the above, the limit of 600,000 euros was also eliminated. This way, those with incomes above that amount could also apply the regime, but with a tax rate of 45% for incomes above that amount.

Today it is still known as the Beckham Law regime, but it is no longer aimed at sportsmen, but at skilled workers. The key is that it is intended that skilled workers currently residing abroad move to work in Spain. This is why the regime is quite strict in terms of working conditions.

Key aspects

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 45%. 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 48%.

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 / disadvantages

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.


ONE: The SETR is an optional regime available only to those who move to Spain to work and become tax residents in Spain. Each country establishes its own ways to become tax resident. In the case of Spain, this is regulated by the Personal Income Tax Act. This act establishes that there are three different ways in which an individual can acquire the status of tax resident in Spain:

  • One way to become tax resident in Spain is to stay more than 183 days in Spanish territory during the calendar year. Sporadic absences are included to determine permanence in Spanish territory unless the taxpayer proves his tax residence in another country by means of a certificate of tax residence.
  • Another way of becoming tax resident in Spain is for the taxpayer to have in Spain the main nucleus or base of his activities or economic interests, directly or indirectly. This should be interpreted as a comparison between Spain and other countries. The position of the Spanish Economic-Administrative Court has been that the comparison should be country by country. That is, not of Spain versus the sum of the rest of the world.
  • The last way to become tax resident in Spain consists of having your non-legally separated spouse and/or dependent underage children residing in Spain. This situation accepts evidence to the contrary. It should be noted that an individual may be considered a tax resident in Spain if any of the three situations mentioned above are met (it is sufficient if one of the above is met).


The SETR is only applicable if the tax residence is acquired through the first way and stay more than 183 days in Spanish territory. The reason for this requirement is that the SETR is intended for those who move to Spain. Therefore, the legislator included this requirement to try to prevent abusive use of the SETR.

This can lead to absurd situations. For example, an individual who spends less than 183 days in Spanish territory during the calendar year, but who becomes a Spanish tax resident by any of the other means mentioned would not be entitled to apply for the SETR.

TWO: Another of the requirements of the Beckham Law is that the move to Spain takes place for work reasons. This requirement may seem quite simple at first glance, but it is usually the most problematic of all. The concept of “working” in the context of the SETR is specifically defined in the regulations, which establish 3 situations in which it will be understood that the individual has started to work in Spain:

  • New employment relationship with a Spanish company. You would be in this situation if you moved to Spain to start a new employment relationship with an employer in Spain. This applies to all types of employment relationships, including ordinary, special relationships (company managers, artists, prisoners, longshoremen, etc.) or statutory relationships (mainly public servants), except for special relationships of professional sportsmen, which are expressly excluded from the RETD.
  • Transfer to Spain maintaining the original employment relationship. You would be in this situation if your employer from another country moved you to Spain, without being hired by another company. In other words, you would keep the same employment contract that you had (without prejudice to the corresponding modifications to consider the circumstances of the transfer).
  • Becoming the director of a company in Spain. You would be in this situation if you moved to Spain because of the acquisition of the status of director responsible for the management and representation of the company. This body may consist of a single member (sole director) or a group of members (board of directors). Controversely, professionals and freelancers are excluded.


If you have acquired the status of director in Spain, or are about to do so, then note that to comply with the requirement of the RETD, you cannot directly or indirectly own 25% or more of the company’s shares.

The regulation does not say when this causal link is deemed to exist, so it may be necessary to present evidence to convince the tax authorities. For example, a long period of time between the two moments (moving to Spain and start working) may be an indicator, among other factors to consider, that there is no such causal relationship.

However, there are also different types of evidence to prove causality. For example, according to the binding consultation V1163/2017 of the General Directorate of Taxes, if the transfer to Spain occurred due to the acceptance of a job offer from a Spanish company, and it can be demonstrated that the job offer was received before the transfer to Spain, that would be sufficient to prove the causal link.

As mentioned, this requirement is often the most problematic, as the reality is often more complex than what is provided for in the regulations. Therefore, the application of the rule sometimes requires interpreting concepts and entering the realm of subjectivity. There is an official body (the General Directorate of Taxes), which reports directly to the State Tax Administration Agency, and whose main purpose is to interpret the regulations in those points where it is not clear enough.

THREE: You do not only have to become tax resident in Spain to apply the SETR, it also has to be the first time in 10 years you become tax resident in Spain. In other words, it is not possible to apply for the SETR if you have been tax resident in Spain in any of the last 10 years. The fact that you may have been paying taxes as a non-resident in Spain, i.e. subject to Spanish Non-Resident Income Tax, is not an obstacle to applying for the SETR.

FOUR: It is incompatible with SETR for the foreign employee to exercize any economic activity through a permanent establishment located in Spain. The term “permanent establishment” means a fixed place of business through which all or part of a business activity is carried out. Although it may seem easy to determine whether there is a permanent establishment, the truth is that the limits of the concept can become blurred depending on the case. For example, a website is not a fixed place and yet it is a case where experts often disagree.

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.


The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.