The Beckham Law in a nutshell: tax advantages for those relocating to Spain

Moving to Spain marks a new chapter in life for many, but it also raises questions about how the relocation will affect taxation. In recent years, one of the key topics for work-related relocations has been the so-called Beckham Law, a special tax regime designed for foreign workers. The aim of the regime is to attract international talent to Spain by offering an alternative method of taxation during the first years of residence.

Under the Beckham Law, an individual is taxed only on income obtained in Spain, which can be a significant advantage, especially when economic interests and assets are located abroad. Within the special regime, employment income is taxed as follows:

• 24% tax rate up to €600,000
• 47% on the portion exceeding this threshold

Other income obtained in Spain, such as dividends, interest, and capital gains, is taxed progressively at rates between 19% and 30%.

The regime can therefore provide predictable tax treatment during the first years after relocation, particularly for individuals who earn employment income in Spain while holding assets outside the country.

Eligibility requirements: when does the special regime apply?

The application of the Beckham Law requires that several conditions be met:

• The applicant must not have been a Spanish tax resident during the previous five years.
• The applicant must relocate to Spain for work-related reasons, for example:
  • under a Spanish employment contract,
  • as an assignee from a foreign employer,
  • to work remotely for a foreign company with the appropriate authorization, or
  • to perform certain executive or managerial duties in a Spanish company.
• The applicant must not obtain income in Spain through a permanent establishment of a foreign entity.

Since 2023, the special regime may also, under certain conditions, be extended to family members such as a spouse and children under the age of 25, provided they relocate together with the main applicant and meet their own eligibility requirements.

Once approved, the regime applies for a total of six years: the year of relocation and the following five tax years, offering a clearly defined and limited period of special tax treatment.

How we support you through the application process

Although the core principles of the Beckham Law are clear, its suitability must always be assessed on a case-by-case basis. Income structure, job responsibilities, assets, and future plans all influence whether applying for the special regime is advisable. In addition, tax status under the Beckham regime may affect how income is taxed in Finland and whether the provisions of the applicable tax treaty will apply. A comprehensive overall tax assessment is therefore essential before making a decision.

Timing is also crucial: the application for the special regime must be submitted within six months from the date the activity in Spain is deemed to have started, for example based on social security registration or another official document.

Costa Juridica supports clients throughout the entire process, including:

• Assessing eligibility and verifying that the requirements for the special regime are met
• Identifying and compiling the necessary documentation
• Preparing and submitting the application to the relevant authorities
• Providing advice if circumstances change

If you are planning to relocate to Spain and would like to determine whether the Beckham Law is the right solution for your situation, we are happy to help you evaluate your options and ensure a smooth and efficient application process.