The Spanish government has recently enacted significant regulatory changes, breathing new life into the application of its special tax regime. Specifically, on December 6, 2023, Royal Decree 1008/2023 was implemented, revising the Income Tax Regulation previously established by RD 439/2007.
This recent amendment marks a pivotal expansion and refinement of the cases eligible under the Beckham Law Regime, signaling a progressive shift in Spain’s approach to taxation for certain individuals and activities.
With these changes, the landscape of Spanish taxation will accommodate a wider spectrum of professionals and scenarios, reflecting the evolving nature of global work and innovation. Let’s get into the details, shall we?
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What is the Beckham Law in Spain?
Before we dive straight into the updates, let’s first discuss what Spain’s Beckham Tax Law is. This attractive tax legislation is specifically for high-earning international workers. Here’s how you can leverage this opportunity and understand its nuances:
For expats relocating to Spain for work and obtaining residency, the Beckham Law in Spain might be your new best friend. It offers a fixed lower tax rate of 24% on income up to €600,000 (around USD 644,000) for six years.
If you’re a business, integrating the Beckham Law into your payroll could attract global talent. And for the rest of us, it means instead of facing Spain’s usual progressive tax rates (up to 48%), you could enjoy a lower flat rate on your Spanish earnings, at least for a while.
In short, if Spain is your work destination, the Beckham Law could benefit you. Make sure to check the eligibility criteria and seek expert advice from a lawyer to make the most of it!
Who is Eligible for Spain’s Beckham Law?
Thinking about taking advantage of Spain’s Beckham Law for a better tax rate? Let’s get straight to the point on what you need to qualify:
- Tax History: You shouldn’t have been a tax resident in Spain during the last five years. Spain is looking for fresh faces for this tax break.
- Reason for Moving: Your move should be work-related. Whether you’ve snagged a job before moving, are transferring within a company, or leading a business (and own less than 25% of it unless you’re on a specific visa), your professional ties are key.
- Work Locally: Most of your work, ideally 85%, needs to be in Spain. Of course, digital nomads have some leeway, but Spain should be your main base.
- Income Source: Ensure your income is coming from a permanent establishment in Spain unless you’re on a nomad, startup, or entrepreneur visa. For most, having a Spanish employer is the way to go.
- Application Timing: Got your Social Security in Spain? Now you have six months to apply for the Beckham Law. Keep an eye on the calendar to avoid missing out.
Stick to these guidelines, and you could be on your way to enjoying some tax benefits under the Spanish sun.
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Expanded Eligibility for Beckham Law in Spain: Who’s Included Now?
The Beckham Law regime has broadened, encompassing a diverse array of new eligible cases. Here’s a closer look at who can benefit from the updated special regime:
1. Remote Workers in Global Teams
Employees working remotely for non-resident companies can now qualify, as long as they have not been specifically directed to do so by their employer. This applies to those using computers and IT systems exclusively for their work.
2. Directors of Spanish Entities
Individuals appointed as directors of Spanish companies are also included. For directors of passive companies, there’s a caveat: they must hold less than 25% of the share capital, either directly or indirectly.
3. Innovative Entrepreneurs
Individuals may be eligible under the special regime if they engage in entrepreneurial activities in Spain that meet the following criteria:
- Innovation or Economic Interest: The activity should be innovative or of special economic interest to Spain, reflecting the country’s focus on progressive and beneficial business ventures.
- Endorsement from ENISA: A favorable report from the National Innovation Company (ENISA) is necessary, ensuring the enterprise aligns with national innovation standards.
- Residency Authorization for Non-EU Residents: Individuals residing outside the European Union must secure authorization for business activity residence before relocating to Spain, ensuring regulatory compliance and commitment to their entrepreneurial venture in Spanish territory.
4. Highly Qualified Professionals
The regime now covers highly qualified professionals involved in economic activities in Spain, especially those serving emerging companies. The applicant must possess the qualifications specified in Article 71 of Law 14/2013 or hold the relevant residence authorization as outlined in the same legal provision.
5. Specialized Professionals in Research, Development, and Innovation
Individuals involved in research, development, and innovation may qualify for the Beckham Law if they meet any of these conditions:
- Certified as research personnel under Law 14/2011.
- Engaged in scientific or technical activities at business entities or R&D&I centers in Spain.
- Part of a research agreement with public or private organizations.
- Employed as professors at Spanish universities, higher education, or research institutions.
Special Note: Taxpayers who have opted for the special regime under any of the economic activities covered by it must comply with the formal obligations (i.e. keep the income and expense record books, keep the invoices according to the regulation that governs it, etc.).
6. Beckham Law Spain: Application for Family Members
Family members eligible for the special regime application include the taxpayer’s spouse, children under 25 or of any age if they have a disability, and in the absence of a marital relationship, the taxpayer’s parents. The requirements are as follows:
- Movement to Spain: Family members may relocate to Spain either before or after the principal but cannot establish tax residency until the principal’s first tax period under the special regime begins. They must move by December 31 of the principal’s first year under the regime.
- Tax Residency and Non-residence Requirement: They must establish their tax residency in Spain and have not been residents for at least 5 years prior to their relocation.
- Income Threshold: The combined taxable income of the family members must not exceed that of the principal taxpayer for each year they are under the special regime.
- No Income from Spanish Permanent Establishments: They must not derive income from a permanent establishment in Spain.
Adherence to these requirements is essential for family members to be included under the special regime alongside the principal taxpayer.
The duration of the regime will be until the last applicable tax period for the principal.
Application Deadlines for Spain’s Beckham Law
To apply for the special regime, different deadlines apply based on the applicant’s status:
Applicants must apply within 6 months from their registration date with the Spanish social security system or from the date their documentation permitting the continuation of social security from their home country is recognized, with no extensions permitted.
Family Members Deadline
Family members have 6 months to apply from either their entry into Spain or from the commencement date of the principal taxpayer’s activity under the special regime, whichever is later. This applies if family members relocate to Spain before the principal taxpayer.
Relocated Taxpayers in 2022 or 2023
Taxpayers who acquired tax residency in Spain in 2023 due to relocation in 2022 or 2023 have a deadline of 6 months from December 16 of the year of relocation to apply. This specific deadline pertains only to new cases eligible under the updated criteria.
Can Lexidy Help me apply for Beckham Law in Spain?
Certainly! Lexidy is well-equipped to assist you in applying for the Beckham Law in Spain. Our team of legal eagles is here to offer comprehensive guidance throughout your application process. We’ll ensure you meet all the eligibility criteria and that your application is accurate and timely.
From clarifying your tax history to deciphering your employment contract, and even managing the strict application deadlines, our expert team of lawyers is dedicated to facilitating a smoother and more financially beneficial transition to Spain under the Beckham Law.
Thinking of taking the next step? Just fill in the form below, and one of Lexidy’s experienced lawyers will reach out to kickstart the process.