What is the Special Tax Regime in Spain?

non resident tax Spain

Maybe you have heard of Beckham’s Law before – a special Spanish tax law that was initially created for the benefit of the international footballer during his Real Madrid days.

Spain introduced and expanded this regime to promote more highly qualified professionals coming to work in the country, improving industry competitiveness and internationalisation.

If you are a foreigner moving to Spain for work, this law could help you to pay less tax in Spain.

Here is a guide to the Special Regime for Displaced Workers in Spain explaining the advantages, who is eligible, and how to apply for the scheme.

 

What is Beckham’s Law?

Known as the Régimen Especial para Trabajadores Desplazados in Spanish, and as Beckham’s Law informally in English, the Special Regime for Displaced Workers is a tax regime for foreigners who move to Spain for an employment offer.

This regime is advantageous to the Spanish economy because it attracts international talent, while also being beneficial to expats who can pay lower taxes while living in Spain for a job.

Fun fact: while the law is still colloquially tied to Beckham, who was one of the first expats to take advantage of it, sports professionals and athletes are no longer eligible for the regime.

The purpose of the regime is to allow expats to maintain a non-resident status for up to 5 years, allowing them to pay tax as if they were a non-tax resident in Spain.

 

Who is eligible for the Special Regime for Displaced Workers?

Anyone of any nationality outside of Spain could apply for this tax scheme, as long as they meet the eligibility criteria below.

Firstly, you cannot have lived in Spain as a tax resident in the previous 5 tax years. This has been reduced from the former restriction of 10 years.

Secondly, you must be moving to Spain – or being ‘displaced’ to Spanish territory – as a result of an employment contract.

You must receive a job offer before entering Spain, be transferred from a foreign international company to a post in Spain, or become a director of a company in Spain (owning only 25% or less of shares).

Thirdly, all of your employment responsibilities must be performed in Spain, with no more than 15% of working activity performed abroad. Additionally, income must come from a Spanish company, not a non-resident ‘permanent establishment’.

Last but not least, you must apply for the regime within 6 months of the contracted employment relationship starting, though repatriation can take place the previous or following tax year from the time of application.

Freelancers and self-employed workers cannot apply unless they hold a valid Digital Nomad Visa, and directors who own 25% of a company located in Spain cannot apply unless they have a Start-up/Entrepreneur Visa.

As mentioned above, professional athletes and sportspeople are unfortunately no longer eligible.

During the 5–6 years of the regime, if the taxpayer ceases to fulfil the eligibility criteria, the Spanish tax agency may exclude them from the scheme, after which they cannot re-apply.

 

What are the benefits of Beckham’s Law?

If you live and work in Spain for more than 183 days a year, you automatically become a tax resident. This means you will be charged the same Impuesto sobre la Renta de las Personas Físicas (IRPF) rates as a Spanish national for income tax.

These progressive tax rates for residents can be as high as 48%, applying to global income, but the Special Regime allows successful applicants to be counted as non-residents for tax purposes.

Expats in the scheme would therefore be able to pay a fixed lower rate for its duration, paying 24% on income up to 600,000€ earned within Spain. Anything above this would be taxed at 45%.

Those in the regime won’t have to pay progressive tax rates or pay tax on worldwide income, only being taxed on their domestic income in Spain at the fixed non-resident tax rate.

These tax conditions will apply for up to 6 years – the five tax periods included in the scheme, plus the year of application.

As with other special schemes, the applicant can also bring their spouse, dependent children under 25 years old, an elderly parent, or a disabled family member of any age – provided they are ‘displaced’ along with the taxpayer and move to Spain within the first year.

 

When is it worth applying for the Special Regime?

Effectively becoming a non-resident for tax in Spain is beneficial for higher earners, who would otherwise have to pay a much larger amount of tax on earnings up to 600,000€.

The scheme can also help to minimise the tax burden for capital gains or inherited assets outside of Spain, as taxpayers are only liable for their income within the country.

Whether Beckham’s Law is worth it or not depends on the personal and economic circumstances of the applicant.

Tax rates can vary from region to region in Spain, so lower earners may find it simpler to stick with the standard rates.

If you apply for the scheme then decide it isn’t worth it after all, you can waive your application – but this will only be enforced from the start of the next year, and you wouldn’t be able to apply for the regime again after leaving.

 

Need help with non-resident tax in Spain?

To apply for the Special Regime for Displaced Workers in Spain, you must complete Modelo 030 and submit it to the Spanish tax agency to receive a foreigner’s tax identification number (NIE).

Once registered with the tax authorities, you must complete and submit Modelo 149, including your identity documents and evidence of eligible employment in Spain with your application.

If approved, you should receive a certificate that you can give to your employer for tax rate deductions – it can take anywhere from 10 days to 1–2 months to complete this process.

You must then file an income tax return in Spain using Modelo 150 each year to make a special tax declaration.

This has been a basic summary of what the Special Regime could offer you and how to apply. If you have any queries about your eligibility or non-resident tax in Spain, you can contact Manzanares Lawyers.

Our team of Spanish and English-speaking lawyers in Spain could evaluate your position and assist with your application for a suitable visa. To arrange a consultation, call us at one of our three offices or email us today.

 

Leave a comment

Blog

Spanish citizenship immigration lawyers Spain

How to make a successful Spanish citizenship application

Spain isn’t just a top destination for expats from across the globe – as of 2024, the country also offers … Read more

Spain immigration lawyers Spanish passport

Spain tops the most desirable passport index for the first time

After being stuck in fourth or third place for most of the 19 years since the annual ranking began, Spain … Read more

student visa working spanish tax rate

Can you work in Spain on a student visa?

People from across the world come to Spain to pursue higher education, but if their course, internship, training, or voluntary … Read more

non resident tax return Spain self employed

Changes to self-employed tax returns in Spain in 2024

The period of annual tax returns in Spain starts in early April, with tax returns for the year 2023–2024 now … Read more

Modelo 720 non resident tax Spain

Modelo 720: Deadline for declaring foreign assets in Spain

The deadline is approaching for Spanish taxpayers to declare any assets they hold abroad to the Spanish tax authority. Both … Read more

English speaking lawyers in Spain

What are your legal obligations as a foreigner in Spain?

When you move to a different country as a foreigner, whether temporarily or to become a long-term resident, there are … Read more

spain immigration lawyers most popular country for uk nationals eu

What is the most popular country for UK nationals living in the EU?

Here at Manzanares Lawyers, we have helped plenty of people from all around the world to become legal residents in … Read more

non resident tax spain remote workers

How much tax do remote workers have to pay in Spain?

Ever since digital nomad visas were announced in Spain to attract remote workers, one of the main proposed incentives was … Read more

non resident tax Spain

The best cities in Spain – and the world – for expats

Moving to a different country is sure to be a big upheaval for anyone, but it can also be incredibly … Read more

Do you have to pay tax in Spain as a non-tax resident if you don't work?

Do you have to pay tax in Spain if you don’t work?

Just like residents in most countries around the world, residents in Spain have to pay taxes to the Spanish government … Read more

non-resident tax Spain IBI surcharge

What is the ‘empty property tax’ in Spain?

With many homes in Spain standing vacant and access to affordable housing being a key social issue, the Spanish government … Read more

ETIAS non-resident Spain

How will the ETIAS affect foreigners who own property in Spain?

The EU is planning to implement new IT systems for better monitoring of travel within the Schengen Area, meaning non-EU … Read more

non resident tax Spain

What is the Special Tax Regime in Spain?

Maybe you have heard of Beckham’s Law before – a special Spanish tax law that was initially created for the … Read more

Spain immigration lawyers - top countries for expats and remote workers

Spain is a Top 2 country for expats and remote workers

Daydreaming about starting a new life somewhere welcoming and sunny? Whether you want to pursue training or education you can’t … Read more

difference between an NIE and TIE

What’s the difference between an NIE and TIE card?

If you’re planning to move to Spain and stay for more than 90 days, you’re going to need to register … Read more

IBI tax Spain

IBI: Who has to pay property tax in Spain?

When buying property or earning income in any country, it’s vital to know about tax liabilities, whether you’re counted as … Read more

How to file 2022 tax returns in Spain

The annual campaign for income tax returns has begun in Spain, with 11th April 2023 marking the start of the … Read more

Spain visa

What happens if you stay in Spain for more than 90 days?

Spain is one of the most popular destinations for visitors from around the world, with over 100 million people visiting … Read more

Spanish wealth tax

Do non-residents have to pay Wealth Tax in Spain?

Many foreigners are unsure about whether or not they have to pay income tax or property tax in Spain, especially … Read more

digital nomad visa tax benefits

What are the tax benefits of Spain’s digital nomad visa?

The Spanish government has teased the introduction of a ‘digital nomad visa’ for over a year as part of the … Read more

spain immigration reform 2022

How did Spanish immigration laws change in 2022?

Obtaining the right permits to live, work, and study in Spain has been a slow and complicated ordeal for many … Read more

popular places foreigner Spanish real estate investment

Popular places for foreigners to invest in Spanish real estate in 2022

More foreigners than ever are buying homes in Spain, fuelling consistent growth in the Spanish housing market. In the first … Read more

Spanish Golden Visas still a top choice for international investors in 2022

Since the programme launched in 2013, the Spanish Golden Visa has remained one of the top choices for residency by … Read more

Ibiza lawyers fines

7 Spanish laws you should know before going to Ibiza

Spanish fines you should know about before going to Ibiza The idyllic island of Ibiza draws millions of tourists, visitors, … Read more

Ibiza Spanish visa

Thinking about living in Ibiza as a digital nomad?

Moving to Ibiza as a digital nomad Working remotely wasn’t an entirely new concept, but when COVID-19 shut everything down … Read more

Spanish residence vs Spanish citizenship

Spanish Residency vs Spanish Citizenship

Spanish residency vs Spanish citizenship: What’s the difference? As you probably know, you don’t have to be a Spanish national … Read more

best places to live in Spain

16 of the best places to live in Spain

If you’ve been dreaming about moving to Spain, or even just buying a second home there to spend holidays in … Read more

Spanish Golden Visa guide

The dos and don’ts of getting a Spanish Golden Visa

For those with sufficient disposable income, the Spanish Golden Visa programme is a great option for gaining legal residency in … Read more

immigrate to Spain

7 reasons to immigrate to Spain

7 reasons to immigrate to Spain Who hasn’t dreamed about spending endless days in the sun, surrounded by beautiful nature … Read more

brexit spanish golden visa

Can Brits still buy holiday homes in Spain after Brexit?

Second homes & Golden Visas: Can Brits buy holiday homes in Spain after Brexit? When Britain officially left the European … Read more

Who inherits the most from Spanish inheritance law

Who inherits the most from Spanish inheritance law?

Of course, the subject of inheritance is one that many want to avoid, as after all, it is centred around … Read more

Why renegotiating your Spanish property might be necessary

Why renegotiating your Spanish property might be necessary

Do you feel like your financial position has changed significantly enough that you cannot keep on top of your current … Read more

How does Spanish inheritance tax differ from the UK

How does Spanish inheritance tax differ from the UK?

Inheritance is never a topic that people want to dwell on. But if you’re spending your retirement years in a … Read more

spanish lawyer that speaks your language

Why is it important to hire a lawyer that speaks your language?

We can imagine that the last thing you will want to encounter is important legal negotiations with someone who doesn’t … Read more

off-plan property in Spain

Buying an off-plan Spanish property: A risk worth taking?

Building your own off plan property in Spain is the dream of many, right? After all, the gorgeous weather, friendly … Read more

spanish housing regulations

What is important to know about Spanish housing regulations?

More and more people are coming to Manzanares Lawyers to learn about the laws on renting out property in Spain. … Read more

All you need to know about Spanish property conveyancing

All you need to know about Spanish property conveyancing

When purchasing a property in Spain for the first time, it is highly likely that you are going to want … Read more

why write a spanish will

Why should you make a Spanish Will?

The subject of making a will is one that many shy away from talking about and for good reason! No … Read more

LICENSES FOR NEW CONSTRUCTIONS INCREASED 10.4% IN FEBRUARY

LICENSES FOR NEW CONSTRUCTIONS INCREASED 10.4% IN FEBRUARY

SOURCE: SPANISH REAL ESTATE MAGAZINE 06/05/2019 Licenses for building new property increased 10.4% in February, when 9.168 licenses were granted … Read more

SALES ON NEW PROPERTY INCREASE ON 14.4% ON THE FIRST QUARTER

SALES ON NEW PROPERTY INCREASE ON 14.4% ON THE FIRST QUARTER

ON THE FIRST QUARTER OF THE YEAR, 133.989 UNITS WERE SOLD. TRANSACTIONS ON NEW PROPERTY INCREASED ON A 14.4% ANNUAL, … Read more

LUXURY HOTEL COMPANIES FOCUS ON THE COSTA DEL SOL

LUXURY HOTEL COMPANIES FOCUS ON THE COSTA DEL SOL

SOURCE: SPANISH REAL ESTATE MAGAZINE 07/05/2019 Four Seasons lands on the Mediterranean sea in the entrance of Marbella, hand in … Read more

Property prices increase for the first time in six years

Property prices increase for the first time in six years

According to the Second hand property sale price index (IPVVR in Spanish), which is produced by the Land Registry using … Read more

Spain Flag

“Spain is back”

JPMorgan states on its last report: “Spain is back”. The American company increases the 2014 GDP forecast for Spain, encouraging … Read more

Málaga airport hit last august a record in number of visitors

Málaga airport hit last august a record in number of visitors

For Malaga airport, last August was the month with the highest number of users of its history, with 1,680,707 passengers, … Read more

Spanish Golden Visa

Main benefits from recent “Golden Visa” in Spain

After Law 14/2013, dated 27th of September, went into force, a significant number of applications for “visa” or residency in Spain … Read more

European Justice ruled against Spanish Inheritance Tax

European Justice ruled against Spanish Inheritance Tax

In recent declarations raised, European courts declared that Spanish Inheritance and Donation Tax partly breaks European Union regulations. Luxembourg Court ruled on 3rd of September 2014 that this … Read more

Blog
Call Now Button