Beckham Tax Regime: Conditions and Nuances

A special tax regime operates in Spain to attract highly qualified foreign professionals, and now, even digital nomads. It is colloquially referred to as the "Beckham Tax Regime," named after the renowned English footballer, David Beckham.
The regime was established in 2007 when efforts were made to recruit Beckham to play for Real Madrid. This led to the enactment of a new law, allowing foreign professionals to pay taxes solely on the income earned within Spain.
In response to questions, tax consultant Gulnara Galeeva, a member of the College of Economists of Catalonia, provides insights into the intricacies of this tax regime.
What is the Beckham Tax Regime?
The tax regime, officially known as "Régimen especial impatriados" (Special Tax Regime for Foreigners), aims to alleviate the tax burden for expatriates moving to Spain. Governed by the Personal Income Tax Law (art. 93 Ley IRPF), it underwent modifications in 2022 through the Startup Ecosystem Support Law.
Who can apply for this regime?
Individuals relocating their permanent residence to Spain qualify under the following conditions:
  1. They have not been residents of Spain for the five tax periods preceding the one in which they moved to Spain.
  2. The move to Spain occurs either in the first year of applying the regime or the previous year due to specific circumstances, such as employment, directorship, innovative business activities, or high-qualified professional services.
"And what about family members?
Spouses and children under 25 (without age limit in case of disability) can also benefit from this tax regime, provided their income does not exceed the main taxpayer's income.
What are its Advantages?

The special tax regime allows applying a fixed tax rate of 24% on income up to €600,000 per year (47% on income exceeding €600,000) for all professional activities.

Passive income earned in Spain is taxed on a progressive scale from 19% to 28%. Incomes earned abroad are not taxed in Spain, except when they constitute income from employment.

There is no need to declare foreign assets (reporting under Form 720).

Luxury tax applies only to property located within Spain, according to the legislation of the region where the taxpayer resides.

Is it Always Beneficial to Request the Special Tax Regime?

No, it depends on the individual taxpayer's situation. The presence and amount of foreign income and assets, real estate abroad that is planned to be sold, etc., all play a role. In the case of the income tax burden, the Beckham regime makes sense for individuals with incomes of €60,000 per year or more.
Are there any drawbacks to this regime?

The main drawback is the inability to apply double taxation avoidance agreements, which may result in a higher tax burden on income earned abroad. The second drawback is the inability to deduct expenses and tax benefits.

In the case of high salaries, the second drawback is not significant, as the expenses eligible for deduction and allowed by law are proportionally insignificant relative to income.

How long can one stay on this regime?

One year from the date of application and the subsequent five years.

Upon completion of the special tax regime, you transition to resident status and must fulfill all tax obligations associated with this status. This includes reporting foreign assets (Form 720), declaring income for income tax and paying taxes (Form 100), reporting luxury tax obligations if applicable (Model 714)."

Can I opt out of it earlier?

Yes, that is also possible.

In the next article, we will explain how to request it, how to opt out of it, and why there is still no request form for digital nomads.

When should the application be submitted?

Within 6 months from the moment of registration with the social insurance authority.

Gulnara Galeeva
By Gulnara Galeeva, Member of the College of Economists of Catalonia, Founder and Managing Partner of JBLC Joint Business and Legal Consulting SL, Founder and Advisor of the accounting company Contabilidad a Medida, Vice President of the European Association of Investors in Cryptoassets ASEIC, and former lecturer at the University of Barcelona (2015-2017).