Before you decide what to do with the Beckham Law, it is more than advisable to understand what are your options. It is only possible to make sure you are choosing the best option if you know the consequences of each of them.
What to analyse
There are two possible aspects to be analysed, on the one hand, whether you meet the requirements to apply the special tax regime and, on the other hand, whether it is appropriate for you to apply it.
Analyse whether you meet the requirements to apply the Beckham Law
The Beckham Law requires certain requirements to be met in order to apply it. If you are not sure whether they are met in your particular case, we can help you find out.
a) The requirement of the tax residence in Spain
In order to apply the special tax regime it is necessary for you to become tax resident in Spain, and you must also do it in a very specific way.
b) The requirement of moving to Spain to work
It is necessary that your move to Spain is caused by a job in Spain. Here there are two aspects to analyze, the working conditions and the causality between the transfer and the work.
c) The requirement of not receiving income from a permanent establishment in Spain
Receiving income through a permanent establishment in Spain disqualifies you from applying the special regime, which is why it is important to analyze this aspect.
d) The requirement of not having been tax resident in Spain in the last 10 years
If you have been a tax resident in Spain in the last 10 years, then you will not be able to apply the special tax regime. That’s why you have to be sure of your situation in the last few years.
Analyse whether it is appropriate in your case to apply the Beckham Law
The Beckham Law has both advantages and disadvantages with respect to “standard” personal income tax. If you’re not sure if it’s worth it in your particular case, we can help you find out.
a) Analyse how much you can save with the Beckham Law
The main purpose of the Beckham Law is to offer tax savings to those who apply it, but how much tax savings are we talking about? Analyze it and clear up any doubts.
b) Analyse the tax impact of other circumstances
In the event that you receive other income in addition to the income from employment, or that such income is generated in other countries, these are circumstances that may significantly alter the result of the analysis. The good news is that this can also be analysed in advance.
Analyzing your situation will give you peace of mind in the sense that you will be certain about the economic outcome if you apply the Beckham Law.
Why to analyse
To plan your move to Spain
a) Plan the agreements that cause the transfer
Depending on the type of employment relationship that motivates the move (new contract with a Spanish company, maintenance of the contract of origin, etc.), it will be necessary to adjust to different conditions. If analysed with sufficient time, certain conditions of the relocation could still be modified so that the requirements are met.
b) Plan aspects that may affect your tax residency
Given the fact that the dates on which the transfer takes place may generate controversy, a prior analysis may help to organise the transfer in such a way as to minimise any risk that the Tax Agency may question the moment at which the tax residence in Spain is acquired.
The tax residence is not only defined by the days of stay in Spanish territory, but there are also other criteria such as the center of economic or vital interests. A previous analysis could help to avoid any surprise in this regard.
To plan your business structure in Spain
If the case is analyzed, and it is determined that there is a reasonable risk that the Spanish Tax Agency may come to the conclusion that the requirement is not met, then there would still be room for manoeuvre to change the situation in time. Otherwise, if the Spanish Tax Agency detected it once the Beckham Law was being applied, then there would no longer be an option to rectify.
To avoid problems in the future
Any of the requirements can be audited by the Spanish Tax Agency after granting the application of the special regime. If they consider that the requirement is not met, they could cancel the application of the special regime with retroactive effect.
Analyzing your situation will give you peace of mind in the sense that you will know the level of risk you are in with respect to compliance with the requirement, so that nothing catches you by surprise.