The Beckham Law is the colloquial name for Spain's special tax regime for inbound workers (impatriates), regulated in Article 93 of the Personal Income Tax Act. It allows individuals who transfer their tax residence to Spain to pay tax under the Non-Resident Income Tax (IRNR) regime during the year of transfer and the following five years, applying a flat rate of 24% on employment income up to EUR 600,000 per year.
In practice
What Is the Beckham Law?
The special tax regime for inpatriates, popularly known as the Beckham Law after footballer David Beckham applied it when he signed for Real Madrid in 2003, allows workers who relocate to Spain to be taxed as non-residents for the first six years. The main benefit is being taxed at the flat rate of 24% on Spanish-source employment income up to EUR 600,000 (above that threshold the rate is 47%), instead of being subject to the progressive IRPF scale, whose marginal rates reach 47% (or higher in some autonomous communities).
The legislation was substantially reformed by Law 28/2022 on the promotion of the startup ecosystem, which broadened access to the regime and introduced significant modifications.
Requirements to Access the Regime
- Not having been a tax resident in Spain during the five years prior to relocation
- The relocation must result from an employment contract with a Spanish company, appointment as a director of a company (provided it is not a wealth-holding entity), the commencement of an entrepreneurial activity classified as innovative or of economic interest, or the provision of highly qualified services for a telecoms, R&D, or entrepreneurship company
- Apply within six months of commencing work activity in Spain (Form Modelo 149)
Main Tax Benefits
- 24% rate on employment income up to EUR 600,000 (vs. progressive IRPF scale up to 47%)
- Spouse and children under 25 can access the regime under the same conditions (Beckham family extension, introduced in 2023)
- Exemption from Wealth Tax on assets located outside Spain
- Only Spanish-source income is taxed (not worldwide income), except employment income and business income
Limitations and Considerations
- Dividends and capital gains of Spanish origin are taxed at the IRNR savings base rate (19-28%)
- Applying the regime requires waiving the benefits of double tax treaties, except those of EU countries
- The Tax Agency may scrutinise whether the activity commencement and genuine connection with the Spanish employer requirements are met
Relevance for Businesses
For companies hiring senior executives or highly qualified professionals from abroad, the Beckham Law is a first-class talent attraction argument. The tax saving can be tens of thousands of euros per year compared with the general IRPF regime, making Spain a competitive destination vis-a-vis other European countries for the relocation of senior profiles.