Beckham’s Law (Spain’s Non-Domiciled Tax Scheme)

In 2015, Spain introduced a special tax regime for wealthy EU expatriates that relocate to Spain. Following in the footsteps of other countries’ successful non-domiciled tax schemes, namely the United Kingdom, the self-declared goal of this programme is to attract high-achievers to relocate to Spain on the back of a job offer. The typical taxpayer profile that qualifies would be a high profile artist, techy, high-ranking corporate employee (i.e .CEO, CFO, CTO), etc.

The tax benefits

In a nutshell, this tax scheme allows EU nationals to make spectacular tax savings on paying Income Tax in Spain (IRPF). If you opt into this scheme, you stand to benefit from substantial tax breaks on both income derived in Spain as well as worldwide income.

• Spanish income. The first €600,000 earned from a source within Spanish territory will be taxed at a flat rate of 24% (in lieu of the standard top marginal rate of 47%). As can be surmised, even for earnings whose source is derived exclusively in Spanish territory, the tax savings are huge.
• Worldwide income. However, it is here where this tax scheme truly shines and comes into its own. Spanish Tax Authorities only tax you on your income derived within Spanish territory. Meaning, any other source of worldwide income is tax-exempt (just like with the popular UKs non-dom tax scheme). Needless to say, this unique tax advantage offers a hugely attractive prospect for those taxpayers with substantial overseas earnings, assets, and interests.
• Best of both worlds. On opting into this special tax regime, a legal fiction takes place whereby EU expats are treated (for admin purposes) as if they are a resident taxpayer in Spain. Albeit in practice, for tax purposes, the taxpayer is regarded as a non-resident taxpayer. Meaning you in fact get the best of both worlds; you get all the perks from being legally resident in Spain, yet you pay a substantially lower tax bill as you are deemed in practice as a non-resident taxpayer.
• Exempt from submitting tax return 720
• Exempt from submitting wealth tax *
• Five years plus one. Because of its outstanding tax advantages, the government time gates the tax benefits. It applies on the fiscal year of relocation as well as on the following five years (total up to six years).

*contingent on the value of your Spanish estate.

Who can apply?

• European Union nationals relocating to Spain as a result of a professional contract. The contract is the essential requirement to opt into this tax scheme. Non-EUs may not apply. Non-EUs can benefit instead from a Digital Nomad Visa, which offers almost identical tax benefits.
• Not to have resided in Spain on the previous 10 years.
• No earnings derived from a permanent establishment in Spain.

If you are a high-flyer, don’t fancy paying much taxes, and wish to relocate to Spain (legally), this is the tax scheme for you. Give us a call.

Larraín Nesbitt Abogados can assist you taking full advantage of this special tax regime for relocated EU expatriates, enabling you, and your family, to benefit from unique tax breaks that will drastically reduce your tax obligations, always within the law.

At Larrain Nesbitt Abogados (LNA) we have over 20 years’ experience assisting clients buying, selling, or renting properties. We can also offer you a competitively priced accounting service to file your landlord taxes every tax quarter nationwide. We are also specialized in immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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