What is the Beckham law?
The Beckham Law, also known as the special regime for posted employees or the Impatriate Law, offers all those interested in residing and working in Spain the possibility to opt for a more beneficial tax regime. Under the Beckham Law in Spain, posted employees can be taxed at a flat tax rate of 24% for 6 years, instead of the progressive personal income tax (IRPF) which ranges from 19% to 47%.
The Beckham Law regime allows beneficiaries to be taxed at 24% on all their income up to a limit of 600,000 euros. Once this figure is exceeded, the 47% tax rate is applied again, as for all other taxpayers.
This regime is optional, but a number of requirements must be met in order to apply for it. Anyone wishing to apply must submit an application to the Tax Agency and, once the documentation has been reviewed, the Tax Agency will decide whether to approve the application.
Main requirements for the application of the Beckham Law ( 2024)
To take advantage of the tax benefits of the Beckham Act, a number of requirements must be met. If you are considering applying for the Beckham Law, these are the essential criteria you must meet:
- The applicant must not have been a tax resident in Spain for the five years prior to relocating for work purposes.
- You must move to Spain for work purposes, hold a job offer prior to your entry into Spain, hold a Spanish digital nomad visa, move from a foreign company or be a director of a company without owning more than 25% of its shares (unless you hold a start-up/entrepreneur visa).
- The work carried out in Spain must constitute the majority of the applicant’s professional activity. A maximum of 15% of the work can be carried out abroad.
- The employer may be a Spanish or foreign legal entity, but the income must not be attributed to a permanent establishment in Spain..
- It is essential to note that these conditions extend to the applicant’s spouse and dependent children under the age of 25, as well as elderly or disabled parents who move with the taxpayer within the first year of the application.
The application for the special regime must be made within six months of registration with the Spanish Social Security. and include the following documentation:
- Your passport and NIE number
- Spanish Social Security number
- Employment contract
Who cannot apply for Beckham’s law?
While the Beckham Law in Spain opens the door to tax advantages for many expatriates, there are specific exclusions to be aware of. The following groups are not eligible to apply for the Beckham’s Law regime:
- Freelancers or self-employed individuals, with the exception of those possessing a digital nomad visa.
- Sports professionals, including athletes, irrespective of their income level or status within their respective fields.
- Directors who have an ownership stake exceeding 25% in Spanish companies, unless they qualify and apply under a startup or entrepreneur visa program.
FAQs
The Beckham Law regime allows beneficiaries to be taxed at 24% on all their income up to a limit of 600,000 euros. Once this figure is exceeded, the 47% tax rate is applied again, as for all other taxpayers. This regime is optional, but a number of requirements must be met in order to apply for it.
Who qualifies for Beckham Law in Spain? ›
Individuals who apply for this tax regime must meet the following requirements: Residence: The person applying should not have been a tax resident in Spain during the last ten years. Work: A new job must justify the move to Spain.
What is the capital gains tax in Spain 2024? ›
National Capital Gains Tax
For Spanish tax residents in 2024, the tax rate starts at 19% for the first €6,000 of profit and increases to 21% for gains between €6,000 and €50,000, 23% for gains between €50,000 and €200,000, and 27% for any profit exceeding €200,000.
What is the Social Security tax in Spain 2024? ›
Social security contributions
In Spain, the minimum monthly base is EUR 1,323 and the maximum is EUR 4,720.50 in 2024. The general contribution rates are 6.47% for employees, depending on the type of contract, and 30.48% for employers, plus a variable rate for occupational accidents (e.g. 1.50% office work).
What is the 180 day tax rule in Spain? ›
If you stay in Spain for more than 183 days out of the year, then you'll be considered a resident taxpayer. Even when spending less than 183 days in Spain, you must apply for residency if you intend to stay in the country for more than 90 days at a time.
What are the taxes for US expats in Spain? ›
For Non- Residents
For Non-resident in Spain, the general flat income tax rate is 24%. However, if you are a citizen of a country in the European Union or the European Economic Area, the rate is 19%. Other income is subject to Spanish non-resident taxes at different rates as well.
What are the tax incentives for foreigners in Spain? ›
The Beckham law in Spain provides a unique tax advantage to foreigners in Spain. Rather than paying a progressive tax on their worldwide income (ranging from 19% to 45%), these individuals are eligible to pay a flat fee of 24% on the income they earn within Spain.
How to avoid paying capital gains tax in Spain? ›
How to avoid paying capital gains tax in Spain?
- Reinvestment in a New Primary Residence: Reinvest the proceeds from the sale into a new primary residence within two years.
- Senior Citizen Exemption: If over 65 and the property has been your primary residence for at least three years, you may be exempt.
Taxpayer tax-free threshold
5,550 euros per year, in general. + 1,150 euros per year, if you are over 65 years old. + 1,400 euros per year, if you are over 75 years old.
What is the capital gains tax rate for non residents in Spain? ›
The capital gains flat rate for non-residents in Spain is a rate of 19 percent charged on the profits gained from the auction of a home. Although the calculation more seems easy, it is more complicated than just working out 19 percent of the sale. This is how you calculate capital gains tax for non-residents in Spain.
Spain taxes its tax residents on their pension, retirement, and foreign social security earnings at a rate from 19% to 47%, depending on overall income. Non-tax residents, however, face tax rates of 8% to 40% depending on overall income.
What is the minimum pension in Spain 2024? ›
The minimum pension for those aged 65 years and over is set at €11,552.8 per year, and €14,466.20 per year for those with a dependent spouse. Those under this age will receive at least €10,808, and €14,466.20 if they have a dependent spouse.
How to avoid wealth tax in Spain? ›
Spanish Wealth Tax exemptions
You own at least 5% of the share capital (or at least 20% including shareholdings belonging to a spouse or other family members) You carry out managerial duties for the company, perceiving a salary for such activities which is at least 50% of your total net earnings.
What is Beckham law in Spain? ›
Under the Beckham Law in Spain, posted employees can be taxed at a flat tax rate of 24% for 6 years, instead of the progressive personal income tax (IRPF) which ranges from 19% to 47%. The Beckham Law regime allows beneficiaries to be taxed at 24% on all their income up to a limit of 600,000 euros.
Is Spain changing the 90 day rule? ›
Spain dropped the 90-day rule.
The rule is a European rather than a Spanish regulation. In addition to considering France's proposals, the government has stated that the ruling is unfair and outdated. However, they can only make changes or drop this rule with the agreement of other members of Schengen.
Can you stay in Spain longer than 90 days if you own a property? ›
Non-EU citizens are restricted to stay up to 90 days out of any 180 consecutive days in Spain. It is referred to as a Schengen Visa and applies to the Schengen area of Europe. Owning a property in Spain won't help with this unfortunately, but if you are buying a new property in Spain it may grant you longer access.
Who is eligible for the tie in Spain? ›
Only non-EU nationals are eligible for a TIE. For the TIE to be granted, you must be a legal resident of Spain. That means you must have obtained your residence and/or work permit and, of course, you would already have a NIE number assigned.
Who is legally eligible to work in Spain? ›
Foreign nationals must first have a job offer to get a work visa in Spain. Their employer will then be required to obtain a work permit to enable you to work legally in Spain. Afterwards, they should apply for a work visa at the Spain consulate in their home country.
What is the new Beckham Law in Spain? ›
Beckham Law tax rates
For starters, the Beckham Law allows foreigners to pay taxes on Spanish-sourced income at a flat rate of 24%. Compare that to the typical progressive tax rates of up to 47%, and it can mean a major difference in your tax bill. Even better, most worldwide income is excluded from Spanish taxation.
What is the criteria for living in Spain? ›
If you plan to work, live, study, invest, or reunite with family in Spain, that requires you to be there for longer than 90 days, you must apply for a residence permit. It is provided in the form of a residence card called the 'tarjeta de residencia', and it is considered your visa.
