Spain's Beckham Law: requirements, deadlines and what it actually saves you

Spain's Beckham Law: requirements, deadlines and what it actually saves you

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Moving to Spain for work raises one question very quickly: what your tax bill will look like. For a lot of expats, the answer depends on a single regime — the impatriate regime, better known as the Beckham Law.

The mechanism is simple: rather than paying progressive resident rates on everything you earn globally, you are taxed like a non-resident on the income you earn in Spain, at a fixed rate of 24 percent on the first 600,000 euros with 47 percent applying beyond that threshold. If your salary is significant, the saving can be considerable.

Not everyone qualifies. As a general rule, you must have been non-resident in Spain for the previous five tax years, the move has to be tied to a job offer, a posting or a company directorship, and the activity must be performed principally on Spanish territory. The latest changes have widened the scope to remote workers and certain entrepreneurs.

The deadline is where most applications fail. The election must be filed ver web within six months of starting the activity that triggers residence. Miss it and the regime is lost for the whole assignment. The benefit then runs for a total of six tax years.

It does not suit every case. Where a large part of your wealth sits abroad, the effect on wealth tax and on the 720 declaration needs to be modelled first. A short analysis before applying is usually time well spent.

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