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

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• WHAT REQUIREMENTS MUST BE MET?
  • Not to have been a tax resident in Spain during the 5 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
    • The acquisition of the condition of administrator of a company, as long as it is not a holding company.
      Remote Workers
       To carry out in Spain an economic activity qualified as entrepreneurial activity
      
  • 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.
  • A person receiving income through a permanent establishment in Spain (subject to the exceptions mentioned above); a self-employed worker carrying out business in Spain could fall under this description. 
• 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 date 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 149 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) and cryptocurrency (Form 721).

    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.

    
    
    Also, as mentioned above, income may be received through permanent establishments in the case of remote workers and highly qualified professionals providing services to emerging companies.

• 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?

  • Yes. The spouse of the employee and children under 25 years of age or disabled children without age limit are eligible. If there is no marital relationship, the other parent may also benefit.