Are you a foreigner and want to come and work in Spain? If you want to pay less tax, you should know about the Beckham Law. In this article, we tell you what it consists of, what requirements you must meet, how to apply and what advantages it brings.
What is the Beckham Law?
The so-called Beckham Law, after the famous footballer David Beckham who was the first to benefit from it when he was signed by Real Madrid, is a special tax regime regulated in article 93 of the Personal Income Tax Law (LIRPF) which is called the special tax regime applicable to workers, professionals and investors moving to Spanish territory.
Advantages of the Beckham Law
The benefits of this special regime for foreigners who decide to work in Spain are detailed below:
– They are taxed as if they were a non-resident for tax purposes, with the difference that income from work or income derived from economic activity is considered to have been obtained in Spain.
– Exemptions include income received in kind, such as food allowances or health insurance.
– The tax rate is 24% up to 600,000 euros. For higher amounts, the rate is 47%. If the law were not applied, a progressive tax rate would be imposed.
What requirements must be met to be able to apply the special regime?
The application of the regime is voluntary and must be requested from the Tax Agency. The requirements for its application are set out in article 93 of the LIRPF and are as follows:
– Not to have been a resident in Spain during the five tax periods prior to the move.
– That the move takes place for one of the following reasons:
o An employment contract.
o Acquisition of the status of director of an entity.
o The carrying out of an entrepreneurial activity.
o The carrying out of an economic activity by a highly qualified professional who provides services to emerging companies or who carries out training, R&D&I activities.
– That it does not obtain income from a permanent establishment in Spain, except in the case of an entrepreneurial activity.
How do I apply for the special regime?
The first thing you should do is to seek the help of expert tax advisors to verify that you meet the requirements of the Law and that you can benefit from its advantages. The application must be made using form 149. The waiver or exclusion from the regime is made using the same form.
To file the special personal income tax return, form 151 must be used. This form has recently been approved and will be applied to the tax period corresponding to the year 2023, which is declared in 2024.
Because of the above, if you want the Beckham Law to apply to your case, you will have to move to Spain and this move will have to be for work purposes.
Contact us if you need help to analyse your case, verify that you meet the requirements and make the IRPF declarations.