Beckham Law (Special Expat Tax Regime) – Spain

Pay flat 24% on Spanish-source employment income up to €600,000 annually instead of progressive rates reaching 47%. Income above €600,000 taxed at 45-47%. Massive savings for high earners - someone earning €200,000 saves approximately €40,000-€50,000 annually compared to standard rates.

Foreign employment income, dividends, interest, rental income, and capital gains from non-Spanish assets completely exempt from Spanish taxation. Only Spanish-source income taxed. Ideal for expats with international investment portfolios or remote work for foreign companies.

Benefits last for year of arrival plus following 5 tax years (total 6 years). After expiration, revert to standard Spanish resident taxation on worldwide income at progressive rates. No possibility to extend beyond 6 years.

Benefits automatically extend to spouse or registered partner and dependent children under 25 (any age if disabled) who move to Spain with primary applicant in first year. Entire family enjoys same flat-rate taxation and foreign income exemption.

Must not have been Spanish tax resident in 5 tax years immediately before arrival. Reduced from 10 years in 2023, making easier for former residents to return. Critical threshold - even one day as tax resident in past 5 years disqualifies.

Must relocate to Spain for work purposes: employment contract with Spanish employer, international intra-company transfer, digital nomad with foreign employment contract (since 2023 Startup Law), or company director/administrator role. Self-employed freelancers (autónomos) generally excluded unless entrepreneurial activity.

At least 85% of work must be performed physically in Spain. Remote workers can spend up to 15% of time working abroad. Strictly enforced - excessive foreign work days can invalidate regime.

Company directors must own less than 25% of shares unless qualifying through startup/entrepreneur visa. Designed to exclude business owners from regime while including hired executives.

MUST apply within 6 months of either starting work in Spain OR registering with Spanish Social Security, whichever comes first. This is absolute deadline - miss it and lose Beckham Law for entire stay. Most common and expensive mistake. File Modelo 149 form with AEAT (Spanish Tax Agency).

Need: employment contract or transfer letter, NIE (foreigner ID number), residence card or application proof, tax residency certificate from previous country proving 5-year non-residency in Spain, passport copy. Professional tax advisor highly recommended for complex situations.

AEAT typically processes Modelo 149 application within 6-8 weeks. During processing, continue with standard withholdings if employed. Once approved, adjustments made retroactively to application date. Rejection rate low if requirements genuinely met.

Salary, bonuses, stock options, benefits from Spanish employer or for work performed in Spain taxed at flat 24%. Applies to employment income only, not investment income from Spanish sources.

Dividends, interest, capital gains from Spanish investments taxed at standard savings rates (19-28%) NOT at flat 24%. This is important distinction - only employment income gets flat rate benefit.

Income from renting Spanish real estate taxed at 24% on gross amount. Limited expense deductions compared to standard regime. Can be disadvantageous if significant Spanish rental portfolio.

Foreign employment income (if <15% of total), foreign dividends and interest, foreign rental income, foreign capital gains - ALL completely tax-exempt in Spain. No reporting required. This is the biggest benefit - can have substantial foreign investment income completely untaxed.

Cannot claim standard Spanish personal and family deductions (mortgage interest, education expenses, family allowances). May make Beckham Law less attractive for lower-middle earners with children. Run calculations before applying.

Spanish Wealth Tax (0.2-3.75% on assets >€700,000) applies only to Spanish assets, not foreign wealth. Major advantage for high-net-worth individuals with foreign holdings. Some regions like Madrid have full wealth tax exemption.

Not required to file Modelo 720 declaration of foreign assets (normally required for residents with foreign assets >€50,000). Preserves financial privacy. Significant administrative simplification.

After 6 years, automatically become standard Spanish tax resident: worldwide income taxation at progressive rates up to 47%, must file Modelo 720 for foreign assets, wealth tax on worldwide assets. Plan exit strategy or prepare for higher taxation.

Clearest winners: professionals earning €80,000+ from Spanish employment with significant foreign assets/income. Tax savings substantial - can exceed €40,000 annually for €200,000 earner. C-level executives, senior managers, specialized professionals.

Remote workers employed by foreign companies earning €50,000+ benefit significantly. Foreign salary treated as exempt if work <15% abroad. Can live in Spain on Digital Nomad Visa while paying minimal Spanish tax.

Individuals with substantial foreign investment portfolios generating dividends, interest, capital gains. These remain completely tax-free under Beckham Law. Ideal for financially independent individuals with overseas wealth.

Not beneficial for: earners under €40,000 (standard rates + deductions may be better), self-employed freelancers (generally excluded), those with significant Spanish-source investment income (taxed at standard rates), families needing deductions.