What is the Beckham Law and how does it affect me if I want to move to Spain?
When, at the age of 28, English footballer David Beckham signed for Real MadridHe probably never imagined that his name would become linked not only to football, but also to a tax regime that is especially attractive to foreigners seeking to settle in Spain.
In 2004, the Spanish law regulating Personal Income Tax (IRPF) was enacted. This law, among other aspects, established a tax benefit that allows foreigners to pay a lower amount of tax, while also exempting them from declaring income generated in other countries.
This measure not only aims to encourage foreign investment; it also seeks to attract specialized talent.
Since the British player was one of the first personalities to take advantage of this regime, at a popular level it became known as the "Beckham Law".
But how does this regulation affect those of us who are not elite athletes, nor do we sign for one of the most famous football clubs in the world?
Let's begin by explaining that the main aspects of this law are the following:
- A flat tax of 24% is applied to income up to 600,000 euros, and 47% to higher amounts.
- Profits earned abroad, such as stocks, financial investments, property and bank accounts, are not subject to tax in Spain.
- People under this law must pay taxes on their wealth and large fortunes, considering only the assets located in Spain, regardless of the assets they own abroad.
The rule is available to any foreigner who moves to Spain and resides in the country for more than 183 days, provided they have not been a tax resident in Spain during the last 5 years. Furthermore, the primary reason for the move must be to sign an employment contract with an employer in Spain.
What if you're interested in a visa for Digital NomadThat is, being able to reside in Spain while maintaining an employment relationship with your company (which is located in another country).
In this case, the Beckham Law also applies: you'll have the option of not paying taxes in Spain for five years. This excludes the income you must demonstrate to obtain the visa, which must be higher than two Spanish minimum wages (€2.100 per month at the time of writing). You will have to pay 24% tax on that income.
If you are interested in the possibility of moving to Spain, either temporarily or permanently, or if you want to diversify your assets by investing in that country, contact usThe AIM Global team will advise you throughout the entire process and support you until the final step. Our goal is to help you achieve your international mobility plans for you and your family.
