Continuity of the Beckham Law special tax regime after a change in activity

The application of the special tax regime for displaced workers (known as the Beckham Law) raises questions when the activity that motivated the relocation ends and is replaced by a new professional position, such as that of a company administrator.

What the DGT has ruled

The Dirección General de Tributos (DGT) has addressed the query regarding whether the termination of an employment relationship as an employee leads to the loss of the special regime if, after a brief period of inactivity, the taxpayer begins a new relationship as an administrator. The body has determined that the cessation of the original activity does not imply exclusion from the special regime, provided that a new employment or administration relationship is initiated that meets the requirements established in Article 93 of the Personal Income Tax Law (LIRPF).

In the specific case analyzed, doubts were raised regarding the continuity of the regime in the event of an overlap of roles and a time gap between the termination as an employee and the registration of the appointment as an administrator in the Mercantile Registry. The DGT maintains that the purpose of this regime, which is to attract talent to Spain, is compatible with brief periods of inactivity or unemployment following the conclusion of the activity that motivated the relocation, provided that a new valid activity is started.

What it means for you

This criterion is relevant for displaced professionals who, after fulfilling the purpose of their initial relocation, change their status from employees to company administrators. The resolution confirms that the transition from one activity to another does not break the status of beneficiary of the special regime, even if there is a small lapse of time between the two or if the appointments present technical overlaps.

What you should do

It is essential to verify that the new activity, whether employment or administration, strictly complies with the requirements of current regulations to avoid losing the benefit. Since the validity of the regime depends on the continuity of an activity compatible with the relocation, each professional transition situation must be analyzed to ensure that the new position fits within the provisions of the LIRPF and the Regulations of the LIRPF (RIRPF).