Tax Benefits of the Beckham Law for Foreign Professionals

1. What is the Beckham Law and Its Benefits?

The Beckham Law is a special tax regime (Ley 35/2006, Article 93) for individuals who become Spanish tax residents due to moving to Spain for employment. If you opt for this regime:

• You are taxed as a non-resident would be, which means:
  
  

  • Spanish-source employment income is taxed at a flat 24% up to €600,000, and 47% on the portion exceeding €600k.
    
    

  • Spanish-source investment income (dividends, interest) taxed at non-resident rates (which are the same as resident savings rates: 19%, 21%, 23% etc.).
    
    

  • Foreign-source income (salary from abroad, investment income from abroad) is not taxed in Spain. This is a huge benefit – effectively, you only pay Spanish tax on your Spanish earnings.
    
    

  • You also only report Spanish assets for wealth tax (foreign assets are exempt from Spanish wealth tax).
    
    

  • You are exempt from filing Modelo 720 foreign asset report, since that law ties to worldwide taxation. (Though there was debate, generally Beckham regime taxpayers are treated as non-resident for that obligation).
    
    

• You maintain this regime for a total of 6 tax years (the year you become resident and the next 5 years). Recent Startup Law changes extended it to potentially 10 years for some cases (e.g., if you have children schooling in Spain, you can get additional 4 years).
  
  

• You are not considered a Spanish tax resident for treaty purposes, meaning you might still be considered resident of your original country under tie-breaker – however Spain internally treats you as resident for other things but taxes you like non-resident.
  
  

In summary, the benefit: Instead of paying Spanish progressive tax up to ~47% on worldwide income, you pay 24% flat on Spanish salary and zero on foreign income. For high earners, this usually saves a lot of money. For example, a €300k salary plus big investment income abroad – normally Spanish tax could be ~€130k; under Beckham regime maybe ~€72k (only on salary part).

This regime was designed to attract talent and has been recently extended to cover remote workers and entrepreneurs under the Startup Law 2022.

2. Eligibility Criteria for the Beckham Law

Not everyone can use this regime. Key conditions include:

• No Spanish tax residency in the past 5 years (changed from 10 years as of 2023). You must not have been a Spanish tax resident in any of the 5 years prior to the year of arrival. This makes it aimed at newcomers.
  
  

• Relocate to Spain for a job or professional activity. Typically this means:
  
  

  • You have an employment contract with a Spanish company, or
    
    

  • You are assigned to Spain by a foreign employer (and a PE established in Spain).
    
    

  • Or you will carry out professional work in Spain (including highly qualified freelancers under certain conditions, or being a director of a company with limits on shareholding).
    
    

  • Under new rules, also eligible are remote workers (digital nomads) working for non-Spanish companies but living in Spain with the new visa, and entrepreneurs starting a venture in Spain, and highly qualified individuals (this extension is quite new).
    
    

• Main reason to move is work. The law historically excluded those whose only Spanish income is from being a company administrator with >25% shares (to avoid abuse by owners) – now adjusted to allow startup founders with higher shares under some limits.
  
  

• Application within 6 months of starting work in Spain. You must file the application (Form 149) with the tax agency timely.
  
  

• Not using it before: You can only use this regime once. And if you are fired and lose the condition, you exit the regime.
  
  

Also excluded are professional athletes since 2015 (ironically due to footballers abusing it widely, the law was tweaked to exclude sportspeople). But others like researchers, tech experts, executives, etc., are main targets.

New categories (Startup Law): Digital nomad visa holders can opt in, and also the period extends to 6+4 years if they maintain conditions (the extra 4 for people who after initial work extend under certain circumstances).

3. How to Apply and Use the Regime

To benefit:

1. Arrive in Spain and begin your employment. Get your NIE, etc.
   
   

2. Submit Form 149 to the Agencia Tributaria within 6 months from start of Spanish activity. With it, usually attach your work contract, a certification from employer, etc. The tax agency reviews and if criteria met, they approve your special regime.
   
   

3. Once approved, your employer should withhold taxes at the flat 24% rate (they need to know you’re under this regime; present them the acknowledgement).
   
   

4. Each year, you file a special tax return Form 151 (different from normal residents’ Form 100) as an expat regime taxpayer, declaring only Spanish-source income.
   
   

5. Enjoy the lower tax. Keep records proving you didn’t earn Spanish income beyond what’s allowed, and that you maintain non-resident of prior 5 years (they might ask, though usually just self-certified).
   
   

If you have foreign investment income, you do not report it on the Spanish return (but be mindful of obligations in source country or your origin country if you remain a tax resident there by treaty or something – but generally you’d break residency with home country, except US citizens).

Exit the regime early? If you leave the job or do something that disqualifies (e.g., become Spanish resident by 5-year rule break fails – not likely, main risk is losing job without new one), you then revert to ordinary taxation from that year onward.

At end of 6 years, you automatically become a normal tax resident from year 7 and then worldwide income tax applies.

4. Real-Life Example

Consider a foreign professional:

• She’s from Canada, never lived in Spain.
  
  

• Gets an offer to work for a Spanish tech company as a director, €200,000 salary. Moves to Spain in 2025.
  
  

• She also has investment portfolio abroad yielding €50,000 per year and a rental property in Canada.
  
  

• She applies for Beckham regime. Approved.
  
  

• In Spain, she pays 24% of 200k = €48,000 in Spanish tax. Her foreign investments and rental are not taxed in Spain at all under this regime.
  
  

• Without Beckham, as a normal resident, her Spanish tax on salary + foreign income could be around €90k+ (roughly 45% on combined 250k total).
  
  

• That’s a huge saving. She still may owe some tax to Canada on the rental income (as non-resident of Canada, Canada might withhold on rental – but there’s a treaty; however, since Spain isn’t taxing it, double tax isn’t an issue because she’s only paying Canada on that).
  
  

• She can keep this through 2025–2030. By 2031, she transitions to regular taxation or might depart Spain before then.
  
  

This illustrates the attractiveness: Spain basically ignores your foreign income.

5. Other Considerations

• Social Security: The Beckham law is only about income tax. You still pay Spanish social security on your Spanish salary (unless on an expat assignment keeping home SS coverage via totalization agreements).
  
  

• Wealth Tax: Under Beckham, foreign assets are not subject to Spanish wealth tax. Only Spanish assets are taxed (but many expats won’t have significant Spanish assets aside from possibly a home, and some regions like Madrid have 100% wealth tax relief).
  
  

• Inheritance/Gift Tax: There’s no special exemption under Beckham for these; if you become Spanish resident, in theory worldwide inheritances could be taxed if the beneficiaries or donors are Spanish residents. But those laws are complex and not overwritten by this regime. Many expats don’t realize that.
  
  

• Modelos 720/721: As mentioned, Beckham taxpayers historically did not file Modelo 720 because they’re not taxed on worldwide assets (the obligation is for residents on worldwide income). However, the exact law wording is a bit ambiguous, but generally Hacienda confirmed they don’t require it from regime participants because foreign income isn’t taxable for them. Similarly 721 for crypto likely not required if under regime.
  
  

• Local income: If you also have some Spanish-sourced freelance income or other, that is taxable at 24% too (some ambiguity if not from employment contract – but law covers employment and self-employment income from Spanish sources, likely all at flat rate).
  
  

• Double tax treaties: Under Beckham, since you’re taxed as non-resident, Spain may not give you foreign tax credits because they’re not taxing foreign income at all. But if some foreign income is taxable as exception (like perhaps foreign dividends from a Spanish company? Actually those are Spanish source so taxed; foreign pensions? They’d normally be exempt because foreign source). Essentially, treaty interplay could be interesting – e.g., if you have a UK gov pension, UK taxes it, Spain doesn’t tax foreign pensions under regime, so no conflict.
  
  

• Returning to normal regime: Plan the end of 6 years. If you plan to stay beyond, there will be a jump in tax – maybe consider certain income events within the 6-year window (stock option exercise, etc.) to use the low tax period.
  
  

6. Recent Changes (Startup Law 2022)

The Startup Law expanded Beckham:

• Reduced the prior 10-year absence to 5 years, so easier to qualify.
  
  

• Opened to remote workers (digital nomads) who work for non-Spanish companies but live in Spain; previously you needed a Spanish work contract. Now if you get the new digital nomad visa and move, you can apply Beckham too. This attracts freelancers and remote employees – a big new group.
  
  

• Allowed entrepreneurs and investors to qualify if certain conditions, as well as highly qualified professionals who start working on their own project.
  
  

• Also, spouse and children of a Beckham law beneficiary can also opt into the regime if they also become tax resident (this is brand new). They must also not have been resident prior etc., but it means a family coming can all potentially use it if say the spouse also starts some work. They each apply separately.
  
  

• Extension of regime to total 10 years if they meet certain criteria at year 6 (related to continuing certain economic activity, or if they have a child in Spanish school, etc. – an incentive to stay).
  

These changes are very new and being implemented, but they make the regime even more attractive and accessible.

Conclusion: The Beckham Law is a highly beneficial tax regime for foreign professionals moving to Spain. It offers a flat 24% tax on Spanish income and an exclusion of foreign income, effectively lowering the tax burden dramatically for many expats. If you meet the criteria (no recent Spanish residency and moving for work) and plan to earn significant income, it’s worth applying. Understanding the rules and recent enhancements is important to make sure you qualify and apply in time.

If you’re considering using the Beckham Law or want to see if it’s the right fit for your situation, book an appointment with our tax advisors. We can assess your eligibility, guide you through the application, and plan your finances to maximize this tax break while it lasts. Schedule a consultation here: Book an appointment.