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What is the Beckham Law?
The Spanish tax regime can be pretty demanding, as regular tax residents have to pay taxes on their worldwide income, which can go up to 52%, and also pay taxes on their worldwide wealth. Quite a lot!
Fortunately, there are several tax benefits available that will help you save money, like the Special Expatriate Tax Regime, known as Beckham Law.
With this regime, you will only be taxed on your Spanish earnings and foreign income from employment. Any other worldwide income won’t be taxed nor will it have to be declared.
What are the main advantages of this law?
The Beckham Law, named after the famous football player, David Beckham, who was the first person to benefit from it, provides many advantages:
- Allows you to pay property and income taxes as if you were a non-resident during your first 6 residency years.
- You will only have to pay a flat tax rate of 24% on your first 600,000 euros income.
- You will only have to pay a flat tax rate of 47% for any income above 600,000 euros.
- Avoid declaring your goods and assets located abroad and getting taxed on your worldwide income and worldwide wealth.
- Avoid getting taxed on foreign capital gains (dividends, sale of shares, interest, etc.).
Please note that you could be subject to a Wealth Tax if your Spanish net worth exceeds the limit of the autonomous community where your highest value of assets is located.
To know more about the net worth limit in your autonomous community, get in touch today.
Who can benefit from it?
If you’re an expat living continuously in Spain for more than 183 days, you will be considered a tax resident and therefore be obligated to pay taxes on your earnings.
The Beckham Law can be applied to Spanish tax residents that fall under the following situations:
- Foreign individuals with a job offer in Spain that haven’t been tax residents in the last 10 years.
- High-income expats that hold executive or management positions.
- Managers who have relocated and work in a Spanish company.
The following individuals are excluded:
- Self-employed workers or Autónomos.
- Professional sports athletes.
- Directors of business entities that own more than 25% of equity.
Avoid getting your application denied, let a proper Tax Attorney handle your process!
At Carbray we know that as a newcomer, handling the Beckham application can be difficult. With so many steps to take into account and communications to maintain with the Tax Agency, it’s only in your best interest if you let a tax expert guide you.
If you’ve spent hours online trying to understand your tax situation, comparing outdated information, and getting lost in bureaucratic jargon, you can stop your search here.
Our team of Tax Attorneys in Spain has been helping hundreds of clients successfully get approval for the Special Expatriate Tax Regime.
We will take taxes off your mind.
Get approval for the Beckham Law with the help of a Tax Attorney.
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