Logotipo Gentile Law

Beckham Law

The  “Beckham Law” or “Beckham Regime”  is an optional and attractive tax regime applicable to workers relocating to Spanish territory due to an employment contract or the acquisition of a position as an administrator , provided in Article 93 of the Personal Income Tax Law, through which several significant tax benefits can be enjoyed.

We guide the client through the different processes covered by Beckham Law

Contact us

Beckham Law

  • Call or meeting with the client, to learn more about their situation and be able to give them personalized advice, as well as recommendations or suggestions.
  • Review of compliance with the requirements to apply to the Beckham Law.
  • Preparation of the necessary documents for such application, coordinating with the client and his or her employer to prove in a reliable way the fulfillment of the requirements
  • Application of the Beckham Law and follow-up of the process until its completion, as well as subsequent advice on the filing of annual tax returns.

Memo Beckham Law

Fiscal Benefits

24% until the first
600.000€

General income is taxed at a tax rate of 24% up to the first 600.000 euros. Dividends, interest and capital gains (LIRNR art.25.1.f), are taxed at a scale of 19 to 26%.

Only income generated in Spain is taxed

It willbe taxed exclusively on income generated in Span and on worldwide earned income.

Exemption from the obligation to declare assets abroad

Exemption from the obligation to declare assets abroad.


Requirements

  • WHAT REQUIREMENTS MUST BE MET?
    • Not to have been a tax resident in Spain during the 10 tax years prior to the move to Spanish territory.
    • The move to Spain must take place as a result of:
      • An employment contract, with the exception of the special employment relationship of professional sportsmen and women, or.
      • The acquisition of the condition of administrator of an entity in whose capital it does not participate in 25% or more, directly or indirectly..
        In any case, their must be a causal relationship between the move to Spain and the beginning of the employment relationship or the position as administrator, so that the passage of a long period of time between both moments (move and beginning of the employment relationship) my be an indication, among other factors to be considered, that there is no such casual relationship (DGT CV 21-6-16).
    • Not obtaining income that would qualify as obtained through a permanent establishment located in Spanish territory.
  • WHAT DOES IT MEAN TO OBTAIN AN "EMPLOYMENT CONTRACT?
    • This condition will be understood to be fulfilled when an ordinary or special employment relationship, other than the one indicated above, or a statutory relationship with an employer in Spain is initiated, or when the posting is ordered by the employer and there is a letter of posting form the employer.
    • It is also important to refer to the labor regulations in order to ensure that the applicant may have an "ordinary or special employment relationship" with the contracting company. Among others, those partners who maintain control of a company must necessarily be included in the special regime for self-employed workers and not the ordinary or special regime required.
  • WHAT IS A PERMANENT ESTABLISHMENT?
    • It is understood that a person operates through a permanent establishment in Spanish territory when, by any title, he has there, on a continuous or habitual basis, installations or workplaces of any kind, in which he carries out all or part of his activity, through an agent authorized to contract , in the name and on behalf of the nonresident, who habitually exercises such powers.
    • In particular, the following are understood to constitute a permanent establishment: management headquarters, branches, offices, factories, workshops, warehouses, stores, stores or other establishments, mines, oil or gas wells, quarries, agricultural, forest or livestock farms or any other place of exploration or extraction of natural resources, and construction, installation or assembly works whose duration exceeds 6 months.
    • It is important to pint out that any Spanish tax resident individual who is a self-employed professional (except if it is exclusively for an administrator position) or who develops an activity on his own account in or from Spain for which he will receive income from economic or professional activities, is considered to obtain income that could be considered as received by a permanent establishment itself and therefore the Regime cannot applied.
    • In this sense, it must be considered tha the Spanish tax law and the General Directorate of Taxes in its interpretation understand that the professional partners of companies that develop professional activities and that render services as such would obtain income from professional activity and therefore cannot apply the Regime.
  • WHO CANNOT APPLY TO THIS REGIME?
    • Whoever does not fulfill the previous requirements.
    • Professional sportsmen and women.
    • Self-employed workers.
    • Administrator of companies that have shares or in which they are considered as related parties according to the tax law (i.e. an indirect or direct participation of more than  25% of the capital stock of the company (art. 18 LIS))
  • HOW LONG CAN THE REGIME BE ENJOYED?
    • During the tax period (which coincides with the calendar year) in which the change of residence takes place and the 5 subsequent tax periods.
  • HOW IS THE APPLICATION TO THE REGIME REQUESTED?
    • By means of form 149 within 6 months from the date on which the hiring company in Spain registers the interested party in the social security system or from the dato on the document certifying the maintenance in the social security system of the country of origin.
      Likewise, the application must be accompanied by the documentation proving compliance with the requirements.
  • HOW CAN I LEAVE THE REGIME?
    • At any time before the end of the tax year to take effect for that tax year by means of form 149.

      Likewise, one is excluded from the Regime if there is non-compliance with any of the requirements. Such non-compliance must be reported to the AEAT within 1 month. The change of the employer by which initially came to Spain for another employer, or the signature of a new contract with the employer, does not determine the expulsion from the special regime (DGT CV 28-3-16; CV 4-5-17), being able to remaning a short period of time in a situation of unemployment or inactivity between the cessation of the labor or administrator relationship that motivated, in a real and effective way, the displacement and beginning of the new labor or administrator relationship (DGT CV 6-717.

      If you renounce or are excluded from the Regime, you will not be able to opt for its application again.

  • TAX RETURN
    • Through Form 151 in the months of May and June of the year following the year in which the tax return is filed.
  • FORM 720
    • Those who have opted for this regime will be exempt from the obligation to file the information return on assets abroad (Form 720) (DGT CV 16-1-14).

      Likewise, the tax periods in which this regime is applicable are not considered for the purposes of the application of the exit tax on capital gains due to change of residence.

  • WHAT INCOME CAN I RECEIVE??
    • You can receive passive income (i.e. dividends, interest and capital gains), as well as remuneration for the exercise of the functions of the position of administrator.

  • INTERNATIONAL DOUBLE TAXATION AGREEMENTS
    • They will be considered tax residents in Spain but will not be able to obtain tax residence certificates for the purposes of the Double Taxation Avoidance Agreements signed by Spain. They will be limited in their ability to eliminate double taxation to the provisions of the Spanish internal regulations and will not be able to make use of the Double Taxation Agreements.

  • DOES THE REGIME EXTEND TO OTHER MEMBERS OF THE FAMILY?
    • No. It is personal.

Alternativo

Contact Us