The Beckham Law: benefits, requirements, and current status

Pure Living Properties has prepared a comprehensive guide with everything you need to know to benefit from this measure.

Formally known as the Special Fiscal Regime for Workers Displaced to Spanish Territory, the Beckham Law offers multiple benefits and a notable impact on the real estate market of the Costa del Sol, especially in the premium segment. In this article, Pure Living Properties has wanted to detail all aspects of this law, its benefits and limitations, as well as its direct influence on attracting investments and residents to the Golden Triangle (Marbella, Estepona, and Benahavís).

What is the Beckham Law?

This law was passed in the year 2000 with the main goal of attracting high-level professionals and facilitating the arrival of international talent, as it allows expatriates who move to Spain and who have not resided in the country in the last ten years, to opt for taxation under the impatriate regime. This implies that, instead of paying taxes as a regular resident on global income, beneficiaries are taxed only on the income they generate in Spain.

The nickname “Beckham Law” quickly became popular due to the star profile of David Beckham and the media coverage that surrounded his move to Spain. The footballer was the first well-known face to benefit from this measure after signing with Real Madrid in 2003, which extended its use among elite athletes.

What is the main objectives of the Beckham Law?

The main objective of the Beckham Law is to promote Spain’s international competitiveness by attracting qualified professionals and company executives who consider establishing themselves in the country. By offering significant fiscal incentives, Spain seeks to position itself as an attractive destination for foreign investment and global talent.

What are the main benefits of the Beckham Law?

The Beckham Law offers substantial fiscal advantages, makes the tax life of expatriates easier, and increases their capacity to make significant investments, especially in attractive regions like the Costa del Sol. These are the main benefits offered by this measure:

Reduced tax rate

One of the most attractive benefits of the Beckham Law is the reduced tax rate of 24% on income earned in Spain. This rate applies to the first 600,000 euros of annual income, which is significantly lower compared to rates that can reach up to 45% for regular residents taxed under the general system. This fiscal benefit is especially valuable for executives and high level professionals whose income could easily exceed this figure, providing them with considerable savings during the years of application of the regime.

Exclusion from global taxation

Unlike regular fiscal residents in Spain, who must pay taxes on their global income, beneficiaries of the Beckham Law are only required to pay taxes on the income they generate in Spain. This means that any income generated outside of Spain, such as international investments or business earnings in other countries, will not be subject to Spanish taxes under this regime. This feature is particularly beneficial for expatriates who maintain businesses or financial assets in other countries.

Wide duration of the benefits

Beneficiaries can enjoy this regime during the first six years of residence in Spain. This provides a substantial period during which individuals can organize their fiscal and financial affairs more favorably before potentially transitioning to the general tax regime for residents, allowing them to plan long-term with some fiscal stability.

Simplicity in tax management

Expatriates who opt for this special regime also benefit from simpler tax management. By having to declare and pay taxes only on their Spanish income, the complications associated with declaring income from multiple international sources are reduced, simplifying tax filing and financial planning.

Incentive for the international mobility of talents

By offering these fiscal incentives, Spain positions itself as an attractive destination for international talents and high-level executives. This not only benefits individuals but also enriches the business and professional fabric of Spain, fostering diversity and innovation within the country.

Increased purchasing power

The tax savings resulting from the application of the Beckham Law increase the purchasing power of the beneficiaries, allowing
them to invest more in their lifestyles and properties. This has a direct impact on sectors such as luxury real estate, where expatriates often seek to buy high-value residences.

What requirements must I meet to take advantage of the Beckham Law?

Those interested in taking advantage of the benefits and advantages offered by the Beckham Law must meet these requirements:

Residency

Not having been a fiscal resident in Spain during the last five years before applying to the regime.

Employment

The beneficiary must move to Spain for work reasons, with a contract of employment in national territory.

Income

No income should be obtained from a permanent establishment in Spain.

Deadlines

Interested parties must comply with all established deadlines to move and start work in Spain.

Limitations and changes that the Beckham Law has undergone

The Beckham Law has been recently updated to adapt to new scenarios with the main goal of expanding its scope. These modifications aim to make Spain a more attractive destination for international professionals, entrepreneurs, and digital nomads.

Here are the most significant changes following the latest modifications:

Reduction of the non-residency period

Previously, it was required not to have been a fiscal resident in Spain during the ten years prior to the application.
This period has been reduced to five years, thus facilitating access to the regime for more foreign professionals.

Inclusion of new groups

The Startup Law, in force since January 1, 2023, has expanded the scope of the impatriate regime to include remote workers, innovative entrepreneurs, and highly skilled professionals in specific activities such as training, research, and development (R&D+i). This allows more profiles to benefit from the special regime, including those who work remotely using solely telematic means.

Retroctivity

The possibility of applying the Beckham Law retroactively has been introduced for those who have moved to Spain during the second half of 2022 or during 2023, provided they establish their fiscal residence in Spain within the tax period of 2023. This measure resolves previous uncertainties and provides greater legal security to expatriates.

Adaptation of the personal income tax regulations

Royal Decree 1008/2023, published in December 2023, adjusts the Regulations of the Personal Income Tax to align it with the modifications introduced by the Startup Law. This includes specifying the conditions under which taxpayers can apply for the special regime, as well as the necessary documentation for its application.

What is the impact on the luxury real estate market of the Costa del Sol due to the Beckham Law?

The Costa del Sol is one of the main residential destinations in Europe in the high-quality housing segment. The Beckham Law has played a significant role in this phenomenon, attracting individuals with high purchasing power who seek residence in Spain. These individuals, benefited by a favorable tax regime, often invest in luxury properties, increasing demand and prices in the region.

Javier Nieto CEO / General Manager

Meet Javier

Javier is the founder and CEO of Pure Living Properties. Born and raised in Marbella in an entrepreneurial family who settled on the Costa del Sol in the 1960s, when Marbella’s real estate and tourism industry was just a fledgling market, Javier is an expert connoisseur of Puente Romano, which he calls home, and the Golden Mile, but also of the best areas, projects and companies, as their owners and developers have been among his inner circle since childhood.