Our partners from Entre Trámites shared with us the keys to understanding what is the Beckham Law, what are its benefits, and how you can apply for it. Keep reading and learn the details of this law for those foreign professionals who work in Spain.
What is the Beckham Law?
The Beckham Law is a tax regime for expatriate workers in Spain, it allows certain professionals that move into the country to benefit from a better tax regime. This law, which came into force in 2005, aims to attract highly qualified professionals and promote foreign investment.
Who can apply to the Beckham Law?
This law is for foreign professionals who meet the following requirements:
- Being a citizen of a country outside the European Union or the European Economic Area who just moved to Spain.
- Not having been a tax resident in Spain within 10 years before moving to the country.
- Having been hired by a Spanish company or organization, or by a Spanish branch of a foreign company for senior management or executive positions.
- To carry out highly qualified and specialized work activities.
However, the law doesn’t apply to freelance workers, professionals, athletes, or directors of commercial organizations.
Benefits of the Beckham Law
Foreign professionals who meet the requirements can benefit from different tax advantages:
They can choose to pay taxes according to a special regime with a flat tax rate of 24% over their income generated in Spain, for 6 years. This means a significant reduction in comparison to the tax rates applied to ordinary tax residents in the country.
Foreign income tax exemption
They can be exempt from paying taxes for their incomes outside Spain, as long as they meet certain requirements and present the proper tax return.
Advantages of social benefits taxation
They can get a better tax system on social benefits such as pensions or severance payments.
How to apply the Beckham Law in Spain
The application to the Beckham Law should be filed within the first 6 months after having registered in Social Security as an employee of the Spanish organization that is hiring you.
It should be presented to the Spanish Tax Agency through the 149 model, including the following documents:
- Passport and NIE
- Social Security number
- Employment contract with a Spanish company
If you meet all requirements, you can apply and benefit from the Beckham Law for up to 5 years.
Are you considering applying to the Beckham Law but you still have questions? Let the experts from Entre Támites help you out! If you are part of the Aticco Community, you can book a free consultation session here!