Imagine waking up to the Mediterranean sun, enjoying tapas by the beach, and living in one of Europe’s most beautiful countries, all while legally paying a fraction of the taxes most locals do.
Thanks to Spain’s Beckham Law, this dream can be your new reality. It’s no wonder Spain dominates the global lifestyle rankings, with Valencia, Malaga, and Alicante listed in the top three best cities to live in, according to Forbes.
Originally designed to attract top international talent (and famously named after football legend David Beckham), this special tax regime lets you keep more of your money while living the way of life you’ve always wanted.
If you’re a high-earning professional, entrepreneur, or remote worker relocating to Spain, the Beckham Law could allow you to pay zero tax on overseas passive income, instead of Spain’s much higher standard rates.
At TaxMove, we specialize in helping globally-minded individuals like you secure Beckham Law status, handle the paperwork, and meet all the government requirements. This way, you can focus on living well and paying less.
Why just visit Spain when you can live smart, live free, and pay less?
What is the Beckham Law?
The Beckham Law, officially known as the “Special Expatriate Tax Regime”, was introduced in Spain in 2005.
It allows eligible individuals to be taxed as non-residents for six years, thereby benefiting from low taxation (zero tax in some cases) on their worldwide income.
The Beckham Law, also called the special regime for posted employees, allows people working in Spain to benefit from a favorable tax rate on employment income.
Key Features of the Beckham Law
- Lower Tax Rate: Eligible individuals pay a flat tax rate of 24% on their worldwide income up to €600,000 and 47% onwards.
- No Tax on Worldwide Passive Income: They are only taxed on their Spanish income, not on their income from other countries except from their employment income which is taxed on a worldwide basis.
- Duration: These benefits last for up to six years.
Taxation in Spain
Let’s dive into a brief review of the taxes typically applicable in Spain for residents without the Beckham Law.
General Taxable Income
In Spain, general taxable income is taxed on a progressive scale, starting at 19% just above the exempt allowance and rising through 24%, 30%, 37% and 45% up to 47% for income above €300,000. Rates may vary depending on the region.
This category includes most everyday earnings such as employment income, self-employment profits, rental income, pensions, and other non-savings income, all of which are subject to these progressive rates, while dividends, interest and capital gains are taxed separately under the savings regime.
Savings Taxable Income
In Spain, savings income (which includes dividends, interest, and capital gains) is taxed separately from general income under its own progressive scale.
For residents, the rates are 19% on the first €6,000, 21% from €6,000 to €50,000, 23% from €50,000 to €200,000, 27% from €200,000 to €300,000, and 30% on any amount above €300,000.
Non-Resident Income Tax
Non-residents are subject to tax on their Spanish-sourced income only.
For savings income, they pay a flat 19% (dividends, interest, capital gains from Spanish assets).
For general income like employment or rentals, the rate is 19% for EU/EEA residents and 24% for non-EU/EEA residents.
These rates may be reduced under certain tax treaties Spain has with other countries.
Wealth Tax
Wealth tax applies to the assets individuals own.
Residents are taxed on all their assets worldwide, while non-residents are taxed only on assets in Spain.
Rates range from 0.2% to 3.5%, depending on asset value.
Solidarity Tax on Large Fortunes
On top of the wealth tax, Spain applies a second levy aimed at high-net-worth individuals. Introduced in December 2022 as a temporary measure, the solidarity tax on large fortunes was never repealed and is now permanent. It applies to residents whose net assets exceed €3 million at year end.
The tax base follows the same rules as the wealth tax, and most exemptions carry over, including the €700,000 allowance available to both residents and non-residents. From there it is charged on a progressive scale. For anyone relocating to Spain with significant assets, this is a cost to model before the move, not after.
Inheritance and gift tax
In Spain, gift and inheritance tax applies to goods and rights acquired by Spanish tax residents through inheritance, legacy, or other types of succession, as well as through donations or other inter vivos transfers without compensation.
Spanish gift and inheritance tax also applies to goods and rights acquired by non-residents in the aforementioned ways, regardless of their nature, if they are located in Spain, can be exercised in Spain, or must be complied with in Spain.
However, if a Double Taxation Treaty (DTT) exists between Spain and the non-resident’s country of residence, the applicable taxation will be determined by the DTT.
Property Tax
Property owners in Spain have to pay various taxes, including:
- IBI (Impuesto sobre Bienes Inmuebles): This is an annual local tax based on the cadastral value of the property.
- Non-Resident Property Tax: Non-resident property owners must pay an annual tax based on the property’s cadastral value.
Here is a brief table summarizing the key taxes in Spain:
| Tax Type | Resident Tax Rate | Non-Resident Tax Rate |
|---|---|---|
|
General Taxable Income |
19% – 47% |
24% (19% for EU tax residents) |
|
Savings Taxable Income |
19% – 30% |
19% |
|
Wealth Tax |
0.2% – 3.5% |
0.2% – 3.5% (Spanish assets only) |
|
Inheritance and Gift Tax |
7.65% – 34% |
7.65% – 34% |
|
Property Tax (IBI) |
Varies by municipality |
Varies by municipality |
|
Non-Resident Property Tax |
N/A |
Based on the cadastral value |
Exploring the Beckham Law? Let's confirm it's the right move.
Every situation is different. In your free consultation, we’ll assess whether the Beckham Law is your best option for reducing your tax burden in Spain, or point you toward an alternative that suits you better.
Exit Tax
Spain introduced an exit tax in 2015.
It targets individuals who have been residents for at least 10 out of the past 15 years and own certain qualifying shares.
The exit tax is triggered when an individual moves out of Spain.
It taxes the entire gain from the date the shares were acquired, not just the gain during residency in Spain.
Scope of the Exit Tax
The tax applies if:
- The total value of shares exceeds €4 million.
- The individual owns at least 25% of an entity, and the value of that holding exceeds €1 million.
- The taxable gain is the difference between the market value at the end of the last year of residency and the acquisition cost, taxed at rates between 19% and 28%.
Deferral of Exit Tax
The tax can be deferred for up to five years if:
- The move is due to a temporary work assignment.
- The host country is not blacklisted.
- The individual notifies Spanish tax authorities and provides a guarantee.
The tax can also be deferred for up to 10 years if the individual moves to a European Economic Area country and if the individual does not sell the shares during this period.
Advantages of the Beckham Law for Expatriates
- Duration: 6 years (year of arrival + 5 subsequent years).
- Overseas Income: Zero tax on capital gains and dividends earned outside Spain.
- No Remittance Conditions: Exemptions apply even if income is brought into Spain.
- Wealth Tax: Exemption on foreign assets.
- Foreign Assets Declaration: No need to file the 720 form.
- Flat Income Tax Rate: 24% for worldwide employment income up to €600,000; 47% for higher income.
- Family Benefits: Tax benefits extended to spouses and children under 25.
- CFC Rules: Not applicable under this regime.
- Nationality: Years under the Beckham Law count towards acquiring Spanish nationality.
Potential Disadvantages of the Beckham Law
- Worldwide employment income is taxed.
- Freelancers typically do not qualify.
- You cannot benefit from the Spanish Double Tax Treaty Network.
- It only lasts for 6 years.
Eligibility for the Beckham Law
To qualify for the Beckham Law, the following criteria must be met:
- Non-Resident: You must not have been considered a tax resident in Spain for the past five years.
- Employment Contract: You need an employment contract with a Spanish company or a foreign company through an international assignment.
- Limited Activities: The regime primarily targets employees, but company directors and certain self-employed professionals can also qualify under specific conditions, particularly those involved in innovative entrepreneurial activities, startups, or R&D work.
How to Apply for the Beckham Law
Here are the steps for applying for the Beckham Law in Spain:
- Evaluate and Plan:
- Decide if the Beckham Law benefits you.
- Plan how you will apply for it.
- Obtain NIE:
- Get your Número de Identificación de Extranjero (NIE), which translates to Foreign Identification Number, for administrative and tax purposes.
- Submit Form 149:
- Apply for the Beckham Law by submitting Form 149 within six months of registering with Social Security.
- Receive Confirmation:
- If your application is approved, you’ll get a confirmation of your special tax status from the Tax Authorities.
- Declare Status with Form 151:
- Use Form 151 to declare your status under the Special Expatriate Regime.
How Can We Help You?
The Beckham Law in Spain offers significant tax advantages for expatriates, providing a reduced tax rate and exemption from worldwide passive income making Spain an almost zero-tax country for individuals moving from abroad. It is one of our favorite special tax regimes in the EU, along with the Non-Dom status in Cyprus and Malta.
Our experts at TaxMove guide you through every step, from obtaining your NIE and submitting forms to declaring your status.
Start today requesting your free consultation and take advantage of the Beckham Law with TaxMove to enjoy a favorable tax environment while living and working in Spain.
What is the Beckham Law in Spain?
Who is eligible for the Beckham Law?
To qualify, you must:
- Not have been a tax resident in Spain for the past ten years.
- Have an employment contract with a Spanish or foreign company through an international assignment.
- Be employed (self-employed individuals are generally excluded, except for certain R&D activities).
What are the tax rates under the Beckham Law?
How long does the Beckham Law apply?
How do I apply for the Beckham Law?
- Evaluate and Plan: Determine if the Beckham Law is beneficial for you and plan your application.
- Obtain NIE: Get your Foreign Identification Number (NIE) for administrative and tax purposes.
- Submit Form 149: Apply within six months of registering with Social Security.
- Receive Confirmation: Await confirmation from the Tax Authorities.
- Declare Status: Use Form 151 to declare your status under the Special Expatriate Regime.
Can family members benefit from the Beckham Law?
Yes, tax benefits can extend to spouses and children under 25 years old.
What is Form 149 and Form 151?
- Form 149: Used to apply for the Beckham Law within six months of registering with Social Security.
- Form 151: Used to declare your special expatriate tax status once approved.
