Last updated: April 25, 2024

The Special Tax Regime applicable to workers, professionals, entrepreneurs, and investors moving to Spanish territory (in Spanish, Régimen fiscal especial aplicable a los trabajadores, profesionales, emprendedores e inversores desplazados a territorio español), provided for in Article 93 of Law 35/2006, of November 28, on the Personal Income Tax in Spain, commonly known as the Beckham Law, establishes that certain requirements must be met to benefit from the tax advantage. That is, it is not applicable to any taxpayer who wishes to apply it. The preliminary requirement is to obtain the status of a tax resident in Spain, but apart from that, there are other requirements related to employment, deadlines, documentation, etc.

Once it is verified that all the requirements are met, it will be necessary to formally submit the corresponding application for the Beckham Law to the Spanish Tax Agency. Additionally, a series of documents must be attached to this application to prove compliance with the requirements.

It is important to note that the requirements set forth in the legislation may seem clear and precise at first glance, but the reality is that they are often open to interpretation. Therefore, it is crucial to be very careful when analyzing the case and preparing the documentation because any error, no matter how minor it may seem, can lead to the loss or denial of the Beckham Law.

The following briefly describes each of the requirements that must be met to apply for the Beckham Law:

Not having been a tax resident in Spain for the last 5 years

The regulations establish that the applicant cannot have been a tax resident in Spain at any time during the five years prior to their move to Spain.

In this regard, it is important to understand that tax residence is defined according to specific criteria that include the duration of the stay in the country, the location of the main center of economic interests, or the usual residence of the spouse and/or dependent children.

The essential question is, what determines whether someone can be considered a tax resident in Spain? The answer is that there are three ways to be considered a tax resident in Spain:

  • The 183-day rule: One of the ways to obtain tax residency in Spain is to stay more than 183 days in Spanish territory during the calendar year. To determine this stay, sporadic absences are included, unless the taxpayer proves their tax residence in another country through a tax residence certificate. In the case of countries or territories considered tax havens, the Spanish Tax Agency may require proof of stay in such a tax haven for a period of 183 days within the calendar year.
  • The economic interests center rule: Another way to acquire tax residency in Spain is by having in Spain the main nucleus or base of your activities or economic interests, either directly or indirectly.
  • The vital interests center rule: The last way to become a tax resident in Spain is to have your legally non-separated spouse and/or dependent minor children residing in Spain. This situation accepts contrary evidence.

It should be noted that a person can be considered a tax resident in Spain if any of the three aforementioned situations are met (it is sufficient if one of them is met). That said, the 183-day rule is usually the most used.

To verify compliance with this requirement, the Spanish tax authorities may request documentation or evidence proving that the applicant has not been a tax resident in Spain for the last five years. This may include tax returns and tax residence certificates from other countries, among other documents.

Acquiring tax residency in Spain as a result of the move

Another essential aspect to analyze is whether a person is or will be considered a tax resident upon their arrival in Spain. This is crucial because the Beckham Law is an optional regime available only to those who move to Spain and become tax residents in the country. Thus, it only makes sense to consider the Beckham Law if this tax resident status is met, not so much because it is specifically established in the norm, but because the Beckham Law aims to offer a tax resident a treatment similar to that of a non-tax resident. If one is not a tax resident in Spain, then the Beckham Law would not provide any advantage.

Regarding tax residency, it is important to highlight that the Beckham Law is only applicable if tax residency is acquired through the first mentioned path, i.e., the one that involves staying more than 183 days in Spanish territory. The reason for this requirement is that the Beckham Law is intended for those who actually move to Spain. Therefore, the legislator included this requirement to try to prevent the abusive use of the Beckham Law. Although it is very rare, this could lead to absurd situations. For example, an individual who spends less than 183 days in Spanish territory during the calendar year but becomes a Spanish tax resident by any of the other means mentioned (economic interests center or vital interests center route) would not be entitled to apply for the Beckham Law.

Double Taxation Agreements

The previous sections defined the Spanish internal rules for determining if someone can be considered a tax resident in Spain. However, it could happen that, according to the internal rules of another country, that person could also be considered a tax resident in that other country. In these cases, Double Taxation Agreements (DTAs) come into play, which are international treaties between two countries where, among other things, “tie-breaker rules” are established. These rules serve to define in which of the two countries a person is considered a tax resident. These “tie-breaker rules” only come into play when a person is considered a tax resident in both countries according to the internal rules of each.

Moving to Spain for Work

One of the requirements of the Beckham Law is that the move to Spain be for work-related reasons. This requirement might seem quite straightforward at first glance, but it often proves to be the most problematic of all. There are, essentially, two elements that must be considered:

The Work

The concept of “work” in the context of the Beckham Law is specifically defined in the legislation, which establishes up to 7 situations in which it will be understood that the individual has begun working in Spain:

  1. New employment in Spain with an entity registered with the Spanish Tax Agency: You would find yourself in this situation if you moved to Spain to start a new employment relationship with an employer in Spain. This applies to all types of employment relationships, including ordinary ones, special relationships (senior management, household staff, prisoners in penitentiary institutions, etc.), or statutory relationships (mainly public officials), except for special relationships of professional athletes, which are expressly excluded from the Beckham Law.
  2. Transfer to a Spanish entity while maintaining the original employment relationship: You would be in this situation if your employer from another country transferred you to Spain, maintaining the same contract, but assigned to a Spanish entity. In other words, you would keep the same employment contract you had, notwithstanding the corresponding modifications to take into account the circumstances of the move. In this case, to meet the requirement, you would need a letter from your employer ordering the transfer to Spanish territory. The entity to which you are transferred in Spain must be registered with the Spanish Tax Agency.
  3. Remote worker in Spain for a foreign entity (New 2023): You could also move to Spain while maintaining your employment in another country, without needing to be linked to any Spanish entity. This would be the case if the work activity was carried out remotely, by telematic means (computer, phone…). In particular, this circumstance is considered met in the case of employed workers who have an international telework visa.
  4. Acquiring the position of director in an entity in Spain: You would be in this situation if you moved to Spain as a result of acquiring the position of director of a Spanish company. It is worth noting that being a director means, among other things, being part of the company’s governing body, which is ultimately responsible for its management and representation, in accordance with the provisions of the Spanish Capital Companies Law and the company’s statutes. Given the importance of the position, its designation must be made before a notary. Regarding the percentage of participation in the entity, if the entity has a verifiable economic activity, then there are no limits on the percentage of participation. Otherwise, if the company did not have a verifiable economic activity and was considered a patrimonial entity in the terms established by the Corporate Income Tax Law, then the percentage must be less than 25%.
  5. Working as an independent professional (“autónomo”) in an entrepreneurial activity (New 2023): As for what is considered an entrepreneurial activity, the regulations establish that an activity will be qualified as entrepreneurial if it is innovative and/or has special economic interest for Spain and to that effect has a favorable report issued by the Empresa Nacional de Innovación, SME (ENISA), in the terms established by article 70 of the Law 14/2013, of September 27, on support for entrepreneurs and their internationalization. This article briefly describes some of the criteria that ENISA should consider when assessing each case, highlighting the professional profile of the applicant and their involvement in the project, the business plan (which should include a description of the project, as well as its financing), and the elements that generate added value for the Spanish economy, innovation, or investment opportunities. It will not be necessary to provide such a favorable report when one has a residency authorization for entrepreneurs.
  6. Working as a highly qualified independent professional (“autónomo”) providing services to startups (New 2023): As for what is considered a highly qualified professional, the regulations refer to article 71 of the Law 14/2013, of September 27, on support for entrepreneurs and their internationalization. This article lists a series of cases and requirements to understand this circumstance as met, which could be summarized as graduates or postgraduates from universities and business schools of recognized prestige, holders of higher vocational training degrees, or specialists with a comparable professional experience of at least 3 years. In particular, this circumstance is considered met when one has a residency authorization for highly qualified professionals (provided for in the same provision of Law 14/2013), prior to their displacement to Spanish territory. As for what is considered startups, the regulations refer to article 3 of the Law 28/2022, of December 21, on the promotion of the startup ecosystem. This provision establishes a series of requirements, but basically refers to recently established Spanish entities related to science, technology, or innovation. The company for which services are provided must be officially accredited as a startup.
  7. Working as a self-employed professional engaging in training, research, development, and innovation activities (New 2023): Regarding what is considered as training, research, development, and innovation activities, the regulations refer to Article 72 of Law 14/2013, of September 27, on support for entrepreneurs and their internationalization. This article lists a series of cases considered as conducting such activities, for example, scientific and technical personnel carrying out scientific research, development, and technological innovation work in business entities or R&D+i centers established in Spain, researchers participating under an agreement with public or private research organizations, or teachers hired by universities, bodies or higher education and research centers, or business schools established in Spain. This condition is considered fulfilled when one has a residence authorization for training, research, development, and innovation (as provided in the same provision of Law 14/2013), prior to moving to Spanish territory. Regarding the income derived from training, research, development, or innovation activities, it must represent more than 40% of the total business, professional, and employment income.

The Move

The relocation to Spanish territory must occur as a result of the work to be carried out in Spain. However, the regulations do not specify in which cases there is considered to be a causal link between the move to Spain and the start of work, so it is open to interpretation.

A long period between the move to Spain and the start of work can be an indicator, among other factors, that such a causal relationship does not exist. Nevertheless, there are different types of evidence that can demonstrate causality. For example, the binding consultation V1163/2017 of the Dirección General de Tributos (an agency dependent on the Ministry of Finance whose binding consultations must be respected by the Spanish Tax Agency) indicates that if the move to Spain occurred due to the acceptance of a job offer from a Spanish company, and it can be shown that the job offer was received before moving to Spain, this would be clear evidence of the existence of such a causal link. Even without a job offer, if work begins a few weeks after moving to Spain, the chances of convincing the tax authorities are considerably high.

This requirement sometimes proves problematic because reality is often more complex than the regulations suggest. Therefore, it is worthwhile to plan the move in such a way that the causal relationship is as clear as possible.

Not Earning Income Through a Permanent Establishment Located in Spanish Territory

Firstly, it is necessary to mention that the concept of “permanent establishment” is provided for in the regulations for those who have a business in Spain, even if they do not reside in Spain. In this case, those subject to the Beckham Law must reside in Spain, so sometimes confusing situations arise.

In any case, this requirement basically means that one cannot carry out an activity as a freelancer (“autónomo”) in Spain, outside of the specifically provided cases (conducting an entrepreneurial activity; providing services to start-ups; or conducting training, research, development, and innovation activities).

Special care must be taken with tax-transparent or “pass-through entities,” such as the “Limited Liability Company (LLC)” from the United States, the “Limited Liability Partnership (LLP)” from the United Kingdom, or the “Kommanditgesellschaft (KG)” from Germany. The reason is that the incomes derived from such tax-transparent entities are directly attributed to their partners. The problem is that, depending on the circumstances, the Spanish Tax Agency might consider that such incomes have been obtained through a permanent establishment located in Spanish territory, which would be incompatible with the Beckham Law.

Submitting the Application on Time and with the Correct Documentation

It is absolutely essential to submit the application on time because otherwise, the application will automatically be rejected. In this sense, the maximum period is six months from the start of the activity. This start is determined by the date of registration with the Social Security in Spain or by the documentation that allows for the maintenance of Social Security in the country of origin. If registration with Social Security is not mandatory, the document that justifies the start of the activity will be taken as a reference.

On the other hand, it is very important to provide, along with the Beckham Law application, all the necessary documentation, and moreover to do so without errors. Normally, if all the documentation is not provided correctly, the Tax Agency will give another opportunity to do so correctly. However, when this occurs, the Tax Agency tends to take the opportunity to request any other documentation they deem appropriate, which would decrease the chances of obtaining a favorable result in the application process. For example, the Tax Agency might request the submission of an additional document (for which they usually grant a period of 10 business days), the acquisition of which, for whatever reason, might not be possible within the deadline (it could be, for example, a document issued by a public administration in another country, the issuance of which requires months).

Special Case of Family Members

There is the possibility that certain direct family members can also benefit from the Beckham Law, without needing to meet the strict requirements regarding work and relocation.

Specifically, the regulations establish that the direct family members of a taxpayer can also apply, if they wish, for the Beckham Law. The following are considered direct family members of the taxpayer (whose application must already have been approved):

  • The spouse;
  • Children under 25 years of age or children with disabilities of any age; and
  • In the absence of a marital bond, the parent of children mentioned in the previous item.

Notwithstanding the above, these family members must also meet some requirements:

  • They must move to Spain with or after the main taxpayer, provided the first tax period in which the Beckham Law applies has not ended;
  • Their income must be lower than that of the main taxpayer;
  • They must not have been fiscal residents in Spain during the five tax periods prior to their move to Spanish territory; and
  • They cannot earn income that would be classified as obtained through a permanent establishment located in Spanish territory.

This special regime will apply during successive tax periods provided that the aforementioned requirements are met and the Beckham Law continues to apply to the main taxpayer.

It is also mentioned that these family members can move to Spain before or after the main taxpayer’s move, but they must ensure not to acquire tax residency in Spain before the first tax period in which the special regime applies to the main taxpayer, or if the move is later, that this last tax period has not ended.

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Requirements to apply for the Beckham Law