The Beckham Law in Spain: requirements, deadlines and what it actually saves you

The Beckham Law in Spain: requirements, deadlines and what it actually saves you

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Relocating to Spain raises one question very quickly: how much tax will you actually pay. For a lot of expats, the answer comes down to one special rule — the special expat tax regime, better known as the Beckham Law.

The idea is straightforward: instead of being taxed as a Spanish resident on your worldwide income, you are treated as a non-resident for tax purposes on the income you earn in Spain, at a fixed rate of 24 percent on the first 600,000 euros and 47% above that. If your salary is significant, the saving can be considerable.

Not everyone qualifies. As a general rule, you must have been non-resident in Spain for the previous five tax years, your relocation must be linked to an employment contract or a director role, and the work must be carried out mainly in Spain. Recent reforms opened the door to Beckham law requirements in Spain remote workers and certain entrepreneurs.

Timing is the part people get wrong. The election must be filed within six months of starting the activity that triggers residence. Miss it and the regime is lost for the whole assignment. Once granted, it applies for the year of arrival and the following five.

It does not suit every case. Where a large part of your wealth sits abroad, the interaction with wealth tax and reporting duties needs to be modelled first. Running the numbers in advance avoids an expensive mistake.

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