Beckham Law Madrid: flat 24% income tax + 100% wealth tax exemption for international executives

Apply the Beckham Law in Madrid and pay a flat 24% income tax rate for up to five years, with 100% wealth tax exemption from the Comunidad de Madrid. Expert advice for corporate executives, finance professionals and legal partners relocating to Spain's capital.

Assess my Beckham Law eligibility and tax saving in Madrid

The problem

Madrid is Spain's primary financial, legal and corporate hub — and one of Europe's most active destinations for the relocation of senior executives, investment bankers, private equity professionals and international law firm partners. The Comunidad de Madrid offers the most favourable fiscal combination in Spain for high earners: the Beckham Law (flat 24% income tax for up to five years) plus a 100% regional wealth tax exemption. Yet many senior executives either fail to file the Beckham Law application within the mandatory six-month window, or do not coordinate their move with a thorough pre-arrival tax plan that addresses exit tax in their home country and the treatment of complex compensation structures (equity plans, carried interest, deferred bonuses). The result is a tax bill that is substantially higher than legally necessary.

Our solution

BMC advises senior executives and international professionals relocating to Madrid on every aspect of the Beckham Law: eligibility assessment, quantification of the expected tax saving, coordination with home-country advisors on exit tax implications, the AEAT application process, and annual management of the special regime for the full five-year period. We have a physical office in Madrid (Castelló 36, 1st floor) and provide specialist advice on complex executive compensation structures including stock options, restricted stock units, carried interest and deferred bonus plans.

Process

How we do it

1

Eligibility assessment and tax saving quantification

We analyse your situation against the Beckham Law requirements (Article 93, IRPF Law 35/2006 as reformed by the 2023 Startup Act): not a Spanish tax resident in the prior five years, qualifying under one of the eligible categories — particularly relevant for the Madrid executive profile: employee transferred by a multinational group, director of a Spanish company, or highly qualified professional. We quantify the expected tax saving under the Beckham Law versus standard IRPF, and model the additional benefit of the Comunidad de Madrid's 100% wealth tax exemption.

2

Pre-arrival fiscal planning and exit tax coordination

Before you officially become a Spanish tax resident, we advise on timing decisions and coordinate with home-country advisors: exit tax implications (particularly for UK, US, German and Dutch nationals), treatment of equity compensation plans under the applicable double tax treaty, the optimal timing of the official move relative to bonus payments and equity vesting events, and the structure of your income from day one of Spanish residency.

3

Beckham Law application (modelo 149)

We prepare and submit the Beckham Law application to the AEAT using the official modelo 149, within the six-month window from Social Security registration. We manage all AEAT correspondence until formal approval is received and advise your employer's payroll and HR teams on the correct withholding rate to apply from the date of application.

4

Annual filing and complex compensation management

For the full duration of the regime, we prepare and submit your annual income tax return under the special expatriate regime (modelo 151), analyse the source and treatment of each income component (salary, equity, deferred bonus, carried interest, foreign dividends), and advise on the strategic transition to standard IRPF in the year the regime ends — including which assets to restructure or divest before the change of regime.

24%
Beckham Law flat rate on Spanish-source income up to €600k
100%
Regional wealth tax exemption in the Comunidad de Madrid
5 years
Maximum duration of the special expatriate regime
>€3M
Threshold for Solidarity Tax on Large Fortunes (ITSGF)

I relocated from New York to Madrid as MD of a private equity fund's Spain office. BMC coordinated with my US advisors on the expatriation tax position, structured the treatment of my carry correctly under the Beckham Law, and managed the annual filings for the full five-year period. The tax saving across the five years was over €500,000. Having a physical office in Madrid made the relationship significantly more productive.

Andrew Cartwright Managing Director, Private equity fund — New York / Madrid

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Beckham Law in Madrid: the most competitive fiscal environment in Spain for senior executives

Madrid is the nerve centre of Spain’s financial, legal and corporate ecosystem. The city’s concentration of investment bank offices, international law firm seats, private equity and venture capital fund managers, management consultancies and global technology headquarters makes it the primary destination for the relocation of senior international executives to Spain.

Spain’s Beckham Law — formally the special expatriate tax regime under Article 93 of IRPF Law 35/2006, as reformed by the 2023 Startup Act — combines in Madrid with a unique regional advantage: the Comunidad de Madrid’s 100% exemption on the regional wealth tax portion. The resulting fiscal position — flat 24% income tax rate plus zero regional wealth tax — makes Madrid one of the most competitive capitals in Europe for the relocation of senior professionals and high-net-worth individuals.

BMC has a physical office in Madrid at Castelló 36, 1st floor, 28001 Madrid (+34 910 917 811). Our team includes advisors specialised in the Beckham Law for senior executives, with specific expertise in equity compensation, carried interest, partnership profit share, and complex international income structures.

Who qualifies for the Beckham Law in Madrid?

  • Senior executives relocated by multinational groups: C-suite and senior management joining Spanish headquarters from foreign parent or group companies — the most common profile in Madrid’s corporate environment.
  • Investment finance professionals: Private equity and venture capital fund managers, investment bankers and asset managers relocating to Madrid offices.
  • International law firm partners and professional services: Partners and senior associates joining the Madrid offices of international law firms, consultancies and advisory firms.
  • Remote workers: Professionals who maintain their employment with a foreign company and transfer their residence to Madrid — increasingly common among technology and finance professionals.
  • Entrepreneurs: Founders establishing innovative companies in Madrid’s ecosystem.
  • Company directors: Persons holding a director role in a Spanish company without controlling shareholdings.

The Comunidad de Madrid’s 100% wealth tax exemption: the critical regional differentiator

The Comunidad de Madrid grants a 100% exemption on the regional wealth tax portion — the portion levied under the regional scale, which is the substantive part of the Spanish wealth tax. This means that an executive resident in Madrid pays zero euros in wealth tax on Spanish-based assets, regardless of value.

This contrasts sharply with other major Spanish regions: the Comunitat Valenciana (0.25–3.5% scale), the Canary Islands (0.25–3.12% scale), Catalonia (0.21–2.75% scale) and most other autonomous communities all levy meaningful wealth tax. Only Andalusia matches Madrid’s 100% exemption.

Under the Beckham Law, the taxpayer pays wealth tax only on assets located in Spain (not worldwide assets) — further limiting the base for expatriates who hold their significant assets outside Spain during the Beckham period.

The Solidarity Tax on Large Fortunes (ITSGF): Madrid’s one caveat

The ITSGF is a state-level tax that applies on net assets above €3 million, with a scale from 1.7% to 3.5%. It was explicitly designed to prevent regional wealth tax exemptions from completely shielding high-net-worth individuals, and it cannot be exempted at the regional level. Even with Madrid’s 100% regional wealth tax exemption, Spanish net assets above €3 million face ITSGF.

Under the Beckham Law, however, only Spanish-based assets are within scope. For executives who hold their primary assets outside Spain — foreign company shareholdings, foreign real estate, foreign pension funds, foreign investment portfolios — the ITSGF base may be materially limited or even zero during the Beckham period.

BMC models the ITSGF impact in full before the Beckham period begins, including sensitivity analysis for different asset scenarios.

Complex executive compensation under the Beckham Law in Madrid

For senior executives in the financial and corporate sectors, the treatment of complex compensation under the Beckham Law is often the highest-value advisory question — and the area where incorrect structuring can cost hundreds of thousands of euros.

Key compensation items requiring careful source analysis:

  • Annual salary and cash bonus: If from a Spanish employer, these are Spanish-source income taxable at 24% under Beckham.
  • Stock options and RSUs from a Spanish company: Spanish-source income at exercise or vesting.
  • Stock options and RSUs from a foreign parent company: Require source apportionment — the proportion of the vesting period spent outside Spain may be foreign-source income not subject to Spanish tax under the Beckham Law.
  • Carried interest from a fund: Treatment depends on whether the carry is structured as a capital gain or employment income, the jurisdiction of the fund, and the applicable double tax treaty.
  • Deferred bonus from a former employer: Source analysis required.

BMC analyses each component of the executive’s compensation package before the Beckham period begins. This pre-Beckham analysis is one of the most important and high-return advisory investments an executive can make before accepting a Madrid-based role.

Exit tax from the home country: critical pre-arrival planning

For executives relocating from countries with exit taxation, pre-arrival planning is essential:

  • United Kingdom: Capital gains exit charges on certain assets at the point of departure.
  • United States: Expatriation tax for citizens and long-term green card holders renouncing US tax residence; FBAR and FATCA obligations persist.
  • Germany: §6 AStG exit tax on participations in corporations of 1% or more.
  • Netherlands: Emigration tax on accrued gains in certain investment products.

BMC coordinates with specialised advisors in each home country to plan the optimal sequencing of the move to Madrid relative to these exit tax obligations, ensuring the Beckham period begins on the most favourable possible fiscal footing.

How much does a senior executive in Madrid save with the Beckham Law?

For a Managing Director with annual income of €400,000 (salary plus annual bonus) relocating to Madrid:

  • Under standard IRPF (ordinary resident in the Comunidad de Madrid): the tax burden on €400,000 is approximately €178,000–€185,000 (effective rate of 44–46%).
  • Under the Beckham Law: the flat 24% rate gives a tax burden of €96,000.

The annual saving is approximately €82,000–€89,000, accumulating more than €410,000–€445,000 over the five years of the regime. For incomes of €600,000 (the cap for the 24% flat rate), the annual saving can approach €150,000.

Use our Beckham Law calculator as a starting point. For advisory fees, see how much does applying for the Beckham Law cost.

For a full understanding of the regime, see what is the Beckham Law? or the complete 2026 guide.

BMC office in Madrid: in-person executive advisory

BMC’s Madrid office at Castelló 36, 1st floor, 28001 Madrid (+34 910 917 811) provides in-person advisory for senior executives who prefer face-to-face consultation. The full Beckham Law service is also available entirely remotely for clients in the process of relocating or managing international schedules.

Contact us for an initial eligibility assessment and tax saving quantification at no charge.

FAQ

Frequently asked questions

Madrid combines two fiscal advantages that no other major Spanish city offers simultaneously. First, the Beckham Law (Article 93, IRPF Law 35/2006) provides a flat 24% income tax rate for up to five years on Spanish-source income — versus the progressive scale reaching 47% for ordinary residents. Second, the Comunidad de Madrid grants a 100% exemption on the regional wealth tax portion, meaning residents pay no Comunidad de Madrid wealth tax regardless of the value of their Spanish assets. This combination — 24% flat income tax plus zero regional wealth tax — makes Madrid one of the fiscally most competitive European capitals for the relocation of senior executives and high-net-worth professionals.
The ITSGF is a state-level wealth tax that applies on net assets above €3 million, with a scale from 1.7% to 3.5%. Unlike the regional wealth tax, the ITSGF cannot be exempted by regional legislation — so the Comunidad de Madrid's 100% wealth tax exemption does not shield you from the ITSGF. However, under the Beckham Law, only assets located in Spain are within scope of the ITSGF for Spanish wealth tax purposes. For executives who hold their significant assets outside Spain during the Beckham period — in foreign company shareholdings, foreign real estate, foreign pension funds — the ITSGF base is limited to Spanish-based assets only, typically reducing the exposure materially. BMC models the ITSGF impact before the Beckham period begins.
The treatment of equity compensation under the Beckham Law is one of the most nuanced and high-value areas of the regime for senior executives. The key question is the source of the income. Options and restricted stock units (RSUs) from a Spanish employer company vest as Spanish-source income taxable at 24% under Beckham. Options and RSUs from a foreign parent company — where the vesting period straddles the pre-Spain and Spanish periods — require a source apportionment analysis. The proportion of the vesting period spent outside Spain may be treated as foreign-source income not subject to Spanish income tax under the Beckham Law. BMC performs a detailed equity compensation analysis before you begin the Beckham period.
Yes, subject to the specific structure of the partnership arrangement. Partners who are transferred to the Madrid office of an international law firm or consulting firm may qualify under the transferred employee pathway if there is a genuine employment or secondment relationship with the Spanish entity. The treatment of partnership profit share under the Beckham Law — particularly its source characterisation — requires careful analysis depending on whether the partner receives a salary, profit share, or a combination. BMC has specific experience advising professional services partners relocating to Madrid on the Beckham Law application and income characterisation.
Planning the transition from the Beckham Law to standard IRPF is one of the most important aspects of managing the regime. In the year the regime ends, the taxpayer switches to full ordinary IRPF resident status — including worldwide income. BMC begins transition planning in year four of the regime, advising on: assets to dispose of or restructure before the regime ends, timing of equity vesting events relative to the end of the Beckham period, any income items that should be deferred into or brought forward from the final Beckham year, and the optimal structure of income and assets going forward under the Madrid IRPF regime (which is still competitive, with Madrid's scale being among the lowest in Spain for ordinary residents).

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