The Beckham Law is a tax regime designed to offer foreign workers relocating to Spain a more attractive tax system, allowing them to benefit from favorable taxation during their first few years of residence. Although it was initially created to attract top-level athletes, it is now applicable to a broader group of skilled workers.

How Does It Work? 

When a foreigner moves to Spain for work, they can apply for this law and pay taxes only on the income generated within Spain, avoiding global taxation. Additionally, employment income is subject to a flat rate of 24% on earnings up to €600,000. This represents a significant advantage compared to Spain’s ordinary tax system, where rates can be much higher and progressive, reaching up to 47%.

This benefit lasts for six years from the worker’s arrival in Spain.

Eligibility Requirements

To benefit from the Beckham Law, certain criteria must be met:

• You must not have been a tax resident in Spain during the previous 10 years.
• You must move to Spain for work, either as an employee or as an executive of a company that generates no more than 25% of its income from economic activities.
• You must submit the application to the Spanish Tax Agency within the first six months of starting your employment in Spain.

Advantages and Limitations

Advantages:

• Taxation on income earned only in Spain: Foreign income is not taxed.
• Reduced income tax rate: A flat rate of 24% for income up to €600,000, which is a significant difference from the usual progressive tax scale.

Limitations:

• Restrictions on deductions: You will not be able to take advantage of some common Spanish tax deductions, such as those for a primary residence or dependent children.
• Limited duration: This regime is only applicable for the first six years of residence.

Is It Suitable for Investors?

While the Beckham Law primarily benefits those coming to work, foreign investors who meet the employment requirements can take advantage of this law to optimize their tax burden while residing in Spain. It can also be an excellent option for those interested in the luxury real estate market in Ibiza, allowing you to enjoy a Mediterranean lifestyle with tax benefits.