Claudio Rodriguez, Lawyer / Abogado
You can work in Spain and enjoy the Spanish lifestyle while benefiting from an exceptional tax regime under the Beckham Rule.
The Beckham Rule, which popular name was taken from David Beckham when he arrived at Real Madrid in 2003, is a special tax regime for expatriates introduced by the Spanish government as an incentive to attract talented and qualified workers to Spain and to increase the flexibility for business expats to opt in for Spanish residency. Since 2005, we have seen a considerable increase in employees relocating to, and becoming residents of, Spain under this rule.
Beckham Rule tax breaks in Spain
Expatriates who adhere to the Beckham Rule may enjoy more favourable taxation than the standard tax regime. During the first six years, income generated outside of Spain is not subject to taxes, which can benefit those with foreign income.
Under the Beckham Rule regime, foreign workers who move to Spain and become residents are considered non-tax residents for tax purposes. Therefore, the tax owed on the first €600,000 of Spanish income is fixed at 24% (47% for any sum beyond 600,000 euros. The expatriate’s descendants under 25 years of age (or any age if they are disabled) and their spouse can also benefit from this Rule, provided certain conditions are met.
Therefore, the Beckham Rule regime should be an excellent option for anyone with employment income between €20,000 and €600,000 in Spain, coupled with substantial assets and income outside Spain.
Although the Beckham Rule was originally applicable to foreign employees of Spanish companies, in December 2022, the new amendments approved by the Spanish parliament included other professionals, entrepreneurs, and investors moving to Spanish territory, including digital nomads teleworking for a foreign company in Spain. Read our article about Applying for the Beckham Rule if a Director of a Spanish Company.
In summary, the Beckham Rule addresses the issue of worldwide taxation in the Spanish tax residency regime by excluding wealth tax, capital gains tax, and income tax arising outside Spain for the applicant and their family. Therefore, under the Beckham rule, the Spanish residents will not be taxed on their worldwide income, gains, or assets.
Before deciding if this regime is favourable for you, your worldwide assets, including investments and real estate, and the income and gains generated by those assets, should be considered carefully.
Would you like to learn more about this Regime and whether you are eligible? Contact Us now!
Del Canto Chambers can assist you in Spain and the UK.
