How to Apply for Spain’s Beckham Law Tax Regime

Spain’s “Special Tax Regime for Inpatriates,” known as the Beckham Law, offers a tax framework for foreign professionals moving to the country. Established under Royal Decree 687/2005, its purpose is to attract international talent by providing a simplified and favorable tax structure. This regime allows eligible individuals to be taxed as non-residents, which can result in tax savings for high earners. The law is designed for those relocating for work-related reasons, providing a predictable tax environment for the initial years of residency.

Determining Your Eligibility

To qualify for the Beckham Law, an individual must meet several conditions. The primary requirement is that the applicant must not have been a tax resident in Spain for the five tax periods immediately preceding their relocation. The move to Spain must be directly linked to an employment contract with a Spanish company or the assumption of a director role in a Spanish entity. Recent updates have expanded this to include certain digital nomads and entrepreneurs.

Another condition is that the applicant’s work must be predominantly carried out in Spain, although up to 15% of their professional activities can be performed abroad. The income generated cannot be from a permanent establishment located within Spanish territory. This means the individual is an employee or director, not a freelancer running their own business in Spain, though some exceptions exist for approved entrepreneurial activities.

The regulations also specify exclusions. Professional athletes are barred from applying for this special regime. While directors of companies can qualify, a director’s ownership stake in a company is not a disqualifying factor, provided the entity is not an asset-holding company. These stipulations ensure the law targets specific types of professional talent.

Taxation Under the Special Regime

The central feature of the Beckham Law is that it allows individuals who are physically resident in Spain to be taxed as if they were non-residents. This is governed by the Spanish Personal Income Tax Act. This reclassification creates a distinct advantage compared to the standard progressive tax system that applies to regular tax residents. The special status lasts for the year of arrival and the following five years.

Under this regime, all worldwide employment income is subject to a flat tax rate of 24% on the first €600,000 of earnings. Any employment income that exceeds this €600,000 threshold is taxed at a rate of 47%. This flat-rate system is advantageous for individuals with high salaries, as Spain’s standard progressive tax rates can climb to 47% on lower income brackets.

The tax treatment of other income streams is also a benefit. For investment income such as capital gains, interest, and dividends, only the amounts generated from Spanish sources are subject to tax in Spain. These are taxed at progressive rates ranging from 19% to 28%. Most foreign-source income, such as dividends from a U.S. company or capital gains from selling assets outside of Spain, is not taxed in Spain.

Wealth tax is another area where the Beckham Law provides a benefit. Individuals under this regime are only liable for wealth tax on their assets located within Spain, not on their worldwide assets. The exemption threshold for wealth tax is €700,000, though this can vary. This means that assets held outside of Spain, such as foreign real estate or bank accounts, are not included in the wealth tax calculation.

Information and Forms for Your Application

Before initiating the application, it is necessary to gather a specific set of documents. These include a valid passport, the Spanish Foreigner’s Identity Number (NIE), and proof of registration with the Spanish Social Security system. The employment contract or a letter from the director appointment is also required.

The official application is made using Form 149 from the Spanish Tax Agency’s (Agencia Tributaria) website. This form is the formal request to opt into the special tax regime. Applicants must be prepared to fill out several key information fields, including personal identification data, employer’s details, the date of entry into Spain, and the start date of employment.

Completing Form 149 requires careful attention to detail to ensure all information aligns with the supporting documents. Having all required documents prepared in advance streamlines the process and helps avoid potential delays.

How to Apply for the Regime

The first step is to register with the Spanish Tax Agency by filing Form 030 to be included in the Census of Taxpayers before proceeding with the main application.

The application process is time-sensitive and must be completed within a strict deadline. An individual must submit their application for the special regime within six months from the date they are registered with the Spanish Social Security system. This deadline is inflexible, and missing it results in the forfeiture of the right to apply.

The primary method for submitting Form 149 and all supporting documentation is electronically through the Spanish Tax Agency’s online portal. To use this system, the applicant must have a valid digital certificate or be registered with the Cl@ve PIN system, which are common forms of digital identification for interacting with Spanish government agencies.

After the application package has been submitted, the Spanish Tax Agency will review the documents. While the official response time is stated to be ten working days, it can take one to two months to receive a formal resolution. Once approved, the individual will file annual taxes using Form 151.