In this article, we’ll delve into the Beckham Law in detail and how it can benefit non-resident workers and digital nomads. From its origins to its current application, you’ll discover how this legislation can positively impact your employment and tax situation.
What is the Beckham Law?
The Beckham Law, also known as the Impatriates Regime, is a tax regulation in Spain that offers significant benefits to non-resident workers who decide to establish their tax residence in the country.
Who can benefit from the Beckham Law?
The Beckham Law is mainly aimed at highly qualified foreign professionals who wish to establish their tax residence in Spain. This includes executives, managers, scientists, researchers, and other non-resident workers who can prove their professional experience and qualifications.
How does the Beckham Law work?
The Beckham Law allows non-resident workers to enjoy a more favorable tax regime in Spain for a determined period of time. To benefit from this legislation, applicants must apply for tax residence in Spain and meet certain requirements.
Requirements to benefit from the Beckham Law or special impatriates regime
To opt for this special regime and maintain the status of taxpayers for Personal Income Tax (IRPF), certain conditions detailed in the Spanish tax regulations must be met, especially in Article 93 of the Personal Income Tax Law and corresponding transitional provisions.
Until December 31, 2022:
- Not have been a resident in Spain during the ten tax periods prior to the move to Spanish territory.
- The relocation to Spain must be a result of an employment contract or acquiring the status of administrator of an entity in which there is no significant participation.
- Not earn income classified as obtained through a permanent establishment located in Spanish territory.
From January 1, 2023:
- Not have been a resident in Spain during the five tax periods prior to the move to Spanish territory.
- The relocation to Spain must be a result of:
- an employment contract
- acquiring the status of administrator of an entity
- undertaking entrepreneurial activity
- engaging in highly qualified economic activity
- Not earn income classified as obtained through a permanent establishment located in Spanish territory.
Additionally, since the modification of the legislation in 2023, the possibility of opting for this special regime is extended to new groups of individuals, including teleworkers, entrepreneurs, and professionals, as well as their family members, under certain specific conditions.
Application deadlines:
- Submit the application within six months after the start of the employment relationship in Spain.
- The response to the application should be received within a maximum period of ten days, although it may be delayed up to one or two months in some cases.
Advantages for Non-Resident Workers and Digital Nomads
For digital nomads, this law can be a real blessing. By allowing them to establish their tax residence in Spain under certain conditions, they can take advantage of significant tax benefits while continuing to work remotely for international clients.
Under this legislation, they are taxed at a flat rate of 24% on the first 600,000 euros of income generated in Spain, while income earned outside the country is exempt from income tax for the first six years.
Advantages for International Companies
For international companies with subsidiaries or branches in Spain, the Beckham Law can be a strategic tool for attracting and retaining key talent. By offering employees the opportunity to benefit from a favorable tax regime, companies can enhance their attractiveness as employers and increase employee satisfaction and retention. Additionally, by having highly qualified and motivated workers, companies can improve their competitiveness and productivity in the market.
Furthermore, the Beckham Law can contribute to the internationalization of companies by facilitating the hiring of foreign talent. By offering a more favorable tax environment for non-resident workers, Spain becomes a more attractive destination for international professionals, which can help companies diversify their workforce and access new skills and perspectives.
Optimize your International Business Strategy with the Beckham Law
The Beckham Law not only benefits non-resident workers and digital nomads but can also be a strategic advantage for international companies in Spain. By understanding and leveraging this legislation, companies can improve their ability to attract and retain global talent, thereby strengthening their competitive position and presence in the global market.
Our tax management service in Spain will provide you with the knowledge and experience necessary to make the most of the benefits of the Beckham Law. From assessing eligibility to optimizing tax planning, our team will guide you every step of the way. Contact us today to boost your business strategy with the Beckham Law!
