Residents under the Beckham Law will lose the special regime if they carry out non-permitted economic activities
The special regime for displaced workers, commonly known as the Beckham Law, allows certain taxpayers to be taxed under specific conditions in the Personal Income Tax (IRPF). However, the compatibility of this regime with other economic activities has strict limits that the Dirección General de Tributos (DGT) has once again defined.
What the DGT has ruled
The inquiry analyzes whether performing a professional activity as an accessory to the main employment activity would result in exclusion from the special regime. The DGT has determined that, in accordance with article 93.1.b) of the LIRPF, the only economic activities permitted for those under this regime are entrepreneurial activities or those of highly qualified professionals (cases 3 and 4).
Consequently, if a taxpayer obtains income from economic activities through a permanent establishment that does not fit into these two cases, the exclusion from the special regime will occur in the tax period in which said non-compliance takes place.
What it means for you
If you are a professional or displaced worker who has opted for this special regime, you must be particularly careful with the diversification of your income. Not all economic activities are compatible with this taxation model.
- Limitation of activities: You can only carry out entrepreneurial activities or those of highly qualified professionals.
- Immediate consequence: Carrying out any other economic activity that generates income through a permanent establishment will cause you to lose the right to apply the special regime in that year.
- Scope: This restriction affects both the main activity and those intended to be carried out as an accessory to the employment relationship.
What you should do
When considering the possibility of starting new lines of business or additional professional activities, it is necessary to verify whether these comply with the requirements of cases 3 and 4 of article 93.1.b) of the LIRPF. The nature of the activity and its structure will determine whether you can maintain the tax benefits of your status as a displaced worker or whether the new activity will cause the loss of the regime for the entire tax year.
Frequently asked questions
- Can I perform professional activities as an accessory to my job?
- Only if such activities qualify as entrepreneurial or as highly qualified professionals according to the LIRPF.
- What happens if I start a non-permitted economic activity?
- You will lose the right to opt for the special taxation regime in the tax year in which you carry out said activity.