The Beckham Law offers significant tax benefits for expats in Spain, but not everyone qualifies. Understanding the eligibility criteria is crucial for those considering this advantageous tax regime. This article outlines the key requirements and conditions to help you determine if you can benefit from the Beckham Law.
Table of Content
Who Can Apply?
To qualify for the Beckham Law, individuals must meet specific criteria related to residency, employment, and timing.
Residency Requirement
- Non-Residency: Applicants must not have been residents in Spain for the ten years preceding their move. This ensures that the tax benefits are targeted at new arrivals rather than long-term residents.
Employment Conditions
- Spanish Employment Contract: The individual must have a job offer or employment contract with a Spanish company or be transferred to Spain by a foreign company.
- Role and Income: The employment role should be of a high professional level, often involving management or technical expertise.
Application Timing
- Six-Month Window: Applications must be submitted within six months of the start of employment in Spain. Delaying beyond this period will result in ineligibility.
Income Source Restrictions
- No Permanent Establishment Income: The applicant should not receive income from a permanent establishment in Spain other than their employment. This means freelance work or business income from a personal establishment in Spain disqualifies an individual.
Additional Considerations
- Non-Qualifying Roles: Certain roles, such as professional athletes, freelancers, and directors with significant shareholdings (over 24%) in the employing company, do not qualify for the Beckham Law.
- Work Location: The core of the applicant’s professional activity must be in Spain. However, a small portion of work can be performed abroad, provided it does not exceed 15% of the total professional activity.
Example Scenarios
Qualified Scenario
- Jane, a Software Engineer: Jane moves to Spain to work for a Spanish tech company. She hasn’t lived in Spain for the past ten years and applies for the Beckham Law within three months of starting her job. Jane’s primary work is in Spain, and she earns all her income from her employment contract. She qualifies for the Beckham Law.
Non-Qualified Scenario
- John, a Freelance Graphic Designer: John moves to Spain and works as a freelance graphic designer, earning income from various international clients. Despite his new residency, John does not qualify for the Beckham Law because his income is not derived from an employment contract with a Spanish company.
Conclusion
Determining eligibility for the Beckham Law involves understanding and meeting several specific criteria related to residency, employment, and the nature of income. By ensuring these conditions are met, expats can benefit from significant tax savings under this regime. For personalized advice and assistance with your application, consider consulting a tax professional familiar with Spanish tax laws.