The Spanish "Beckham Law" introduced in 2005 attracts foreign high-income earners to Spain with tax reductions. Eligibility requires being a tax resident in Spain, not for the previous 10 years, and meeting specific salary criteria.
To qualify for the Beckham Law, an individual must meet several specific criteria. These requirements are designed to ensure that the law benefits those who have recently relocated to Spain for professional reasons. Here’s a detailed overview of the qualifications:
1. Recent Arrival in Spain
- First Year of Tax Residency: The individual must be a recent arrival in Spain and must not have been a tax resident in Spain for the 10 years prior to their relocation. This requirement is meant to ensure that the Beckham Law benefits those who are genuinely relocating to Spain for work, rather than individuals who have been living in Spain for an extended period.
2. Employment in Spain
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Employment by a Spanish Company: The individual must be employed by a Spanish company or a Spanish branch of a foreign company. The Beckham Law is specifically intended for employees who have moved to Spain for professional reasons, and it applies primarily to those who have an employment contract with a company based in Spain.
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Exclusion of Professional Athletes: Since the 2010 reforms, professional athletes have been excluded from benefiting from the Beckham Law. This change was introduced to address concerns that the law was disproportionately favoring wealthy sports stars, particularly football players, and was not aligned with its original purpose of attracting a broader range of skilled professionals.
3. Main Economic Activity in Spain
- Primary Work Activity: The individual’s primary economic activity must be carried out in Spain. The Beckham Law targets those who relocate to Spain to perform specific professional roles, and the majority of their work should be connected to their employment in Spain. This means that the individual should be primarily engaged in activities that generate income within Spain.
4. Application Deadline
- Six-Month Application Period: The individual must apply for the Beckham Law within six months of becoming a tax resident in Spain. This typically coincides with the start of their employment in Spain. Missing this application deadline can result in ineligibility for the special tax regime.
5. Expatriates Only
- Non-Resident Status Prior to Relocation: To qualify, the individual must not have been a tax resident in Spain during the previous 10 years before their relocation. This ensures that the law is used by expatriates who are newly relocating to Spain, rather than long-term residents or those who have recently left and returned.
Summary
To qualify for the Beckham Law, an individual must have recently relocated to Spain, not have been a tax resident in Spain for the previous 10 years, be employed by a Spanish company or a branch of a foreign company, and carry out their primary work activities in Spain. Additionally, they must apply for the special tax regime within six months of becoming a tax resident. Professional athletes are excluded from this regime following the 2010 reforms.