The Beckham Law offers qualified individuals a flat income tax rate of 24% for up to six years to attract foreign talent and high-net-worth individuals to Spain.
An individual can benefit from the Beckham Law for a maximum period of six years. Here’s how the duration works:
1. Initial Period
- Start of the Benefit: The six-year period begins from the first year in which the individual becomes a tax resident in Spain and elects to be taxed under the Beckham Law. This typically starts from the year they arrive in Spain for employment and meet the necessary conditions to apply for the special expatriate tax regime.
2. Six-Year Maximum Duration
- Duration Details: The tax benefits under the Beckham Law are available for the tax year in which the individual moves to Spain and the following five tax years. This six-year limit is strictly enforced, meaning that once the period ends, the individual will automatically revert to the standard Spanish tax regime, where they are taxed on their worldwide income at progressive rates.
3. Reversion to Regular Tax System
- Post-Beckham Law Taxation: After the six-year period, expatriates will be taxed under the regular Spanish tax system. This includes paying taxes on both their Spanish and global income, and being subject to the progressive tax rates that apply to all other Spanish residents. For high-income earners, this transition could result in a significantly higher tax burden compared to the favorable rates under the Beckham Law.
Summary
An individual can benefit from the Beckham Law for up to six years, starting from their first year of tax residency in Spain. After this period, they revert to the standard Spanish tax regime, where they are taxed on their worldwide income at progressive rates.