Beckham Law Spain: Inpatriate Tax Regime Guide (Form 151)

What is Beckham Law (Inpatriate Regime) and Who is it For?

The "Beckham Law" is the colloquial name for the Special Tax Regime for Workers Relocated to Spanish Territory, better known as the inpatriate regime. It is regulated in Article 93 of the Personal Income Tax Law and was originally introduced in 2005, being expanded at the end of 2022 as part of the new Startups Law (Law 28/2022). Its purpose is to attract talent and qualified personnel, as well as investors and entrepreneurs to Spain.

It allows individuals who acquire tax residence in Spain for work reasons (or other specific causes such as being a director, entrepreneur, or highly qualified professional) to be taxed under the Non-Resident Income Tax (NRIT) instead of the general Personal Income Tax (IRPF), during the tax period of the change of residence and the following five. This can mean significant tax savings, especially for high incomes, and is a key tool in international tax planning.

Key Points of the Inpatriate Regime (Beckham Law)

Beneficiaries: Employees, company directors (even if they own up to 24% of the company, unless it's a holding company), professionals carrying out an entrepreneurial activity or providing highly qualified services to startups, or activities in training, research, development, and innovation. It can also be extended to spouses and children.
Main Taxation: As a non-resident (NRIT) for most employment income obtained worldwide (with certain limits) and for some investment income and capital gains (subject to DTTs).
General Rate for Employment Income (Form 151): 24% up to €600,000 of taxable base, 47% for the excess over that amount.
Duration: Year of acquiring tax residence in Spain and the following 5 tax periods (total 6 years).
Annual tax return form: Form 151 is used to declare IRPF under this special regime.

Main Requirements to Qualify for Beckham Law in Spain

To opt for this inpatriate regime, the following Beckham Law requirements must be met, among others:

Not have been a tax resident in Spain during the 5 tax periods prior to the one of relocation to Spanish territory.
That the relocation to Spanish territory occurs as a consequence of one of the following main circumstances:
- An employment contract (including special employment relationships such as that of professional athletes under the new regulations).
- Acquiring the status of company director (if not owning more than 24% of the company, unless it's a holding company).
- Carrying out an economic activity qualified as entrepreneurial in Spain.
- Providing services as a highly qualified professional to emerging companies (startups) or carrying out training, research, development, and innovation activities.
The relocation can be ordered by the employer, or the activity can be performed remotely (remote workers).
Not obtaining income that would be classified as obtained through a permanent establishment located in Spanish territory (except for exceptions for entrepreneurial activity or highly qualified professionals).
Submit the option communication (Form 149) within a maximum period of 6 months from the start date of the activity as recorded in the Social Security registration in Spain or in the documentation that allows maintaining the Social Security legislation of origin. Previously, a census registration must be made with Form 030.

Tax Advantages of the Inpatriate Regime (Beckham Law)

Opting for Beckham Law offers significant tax advantages in Spain:

Taxation of employment income: Employment income earned is taxed at a flat rate of 24% up to an annual taxable base of €600,000. The excess over this amount is taxed at 47% (previously 45%). This is often considerably lower than the progressive marginal rates of general IRPF for high incomes.
Investment income and capital gains: Dividends, interest, and capital gains obtained in Spain are taxed at 19% (up to €6,000), 21% (between €6,000 and €50,000), 23% (between €50,000 and €200,000), and 26% (for more than €200,000). Income of this type obtained abroad is generally not taxed in Spain under this regime (with exceptions or if a DTT states otherwise).
Wealth Tax: Only taxed on assets and rights located or exercisable in Spanish territory (real obligation to contribute), not on worldwide wealth.
Solidarity Tax on Large Fortunes: Similar to Wealth Tax, only by real obligation.
Relative simplification: In certain aspects, taxation under Form 151 can be simpler, although it requires proper planning.

Considerations and Drawbacks of Beckham Law

It is not always the most advantageous option. A detailed comparative analysis with the general IRPF regime is crucial, considering:

Most deductions and exemptions of general IRPF cannot be applied (e.g., housing deduction, exemption for reinvestment in primary residence, personal and family minimums, most regional deductions).
A possible severance pay will not be exempt from taxation, unlike under the general regime.
It raises debate about tax fairness, and there are proposals for modifications to increase the rate or add conditions.

Application Process: How to Apply for Beckham Law? (Form 149 and Form 151)

The process to apply for Beckham Law involves several steps and the submission of specific forms to the Tax Agency (AEAT):

Census Registration (Form 030): As a preliminary step, it is necessary to register in the Census of Taxpayers by submitting Form 030, stating the reason for registration as a resident in Spain.
Option Communication (Form 149): The formal application is made by submitting Form 149 ("Communication of the option, waiver, exclusion, and end of relocation to the special regime"). It is essential to meet the deadline of 6 months from the start date of the activity as recorded in the Social Security registration in Spain or in the documentation that allows maintaining the Social Security legislation of origin. Required supporting documentation must be provided.
Tax Agency Resolution: The AEAT will notify its decision. If favorable, the regime will apply from the beginning.
Annual Declaration (Form 151): Once the option for Beckham Law is granted, the taxpayer must annually file their IRPF return using Form 151 ("Personal Income Tax Declaration for taxpayers under the special regime applicable to workers, professionals, entrepreneurs, and investors relocated to Spanish territory"). The filing period is the same as for the general IRPF return (usually between April and June).

Frequently Asked Questions (FAQ) about Beckham Law

What is Beckham Law?+

It is a special tax regime, officially called the inpatriate regime, for foreign taxpayers who move to work in Spain. It was originally introduced in 2005 and expanded at the end of 2022 as part of the new Startups Law (Law 28/2022). Its purpose is to attract talent and qualified personnel, as well as investors and entrepreneurs.

Who can apply for Beckham Law?+

Any foreign taxpayer or Spaniard who moves to Spain for more than 183 days for work reasons can apply. It is aimed at workers, highly qualified professionals, entrepreneurs, and company directors with high salaries. The Startups Law has extended the regime to self-employed company directors, remote workers, and self-employed individuals focused on services to startups or in training, research, development, and innovation activities. It can also be extended to the spouse, children under 25 (or with disabilities of any age), or the parent in the absence of a marital bond.

What are the main requirements?+

It is necessary to move residence to Spain for work reasons. The applicant must not have been a tax resident in Spain in the 5 years prior to the move. If the employee is a company director, they cannot own more than 24% of the company. The employment relationship can be ordinary or special. The move can be ordered by the employer, or the activity can be performed remotely.

What is the main tax benefit?+

It allows paying a fixed Personal Income Tax (IRPF) rate of 24% on income earned in Spain (mainly employment income). This flat rate applies up to €600,000 annually. If income exceeds €600,000, a flat rate of 47% (previously 45%) applies. Under Beckham Law, taxation is primarily on income generated in Spain.

How long can the benefit be applied?+

The duration is 6 years. It can be applied in the year tax residence is acquired in Spain (or the regime is adopted) and the following 5 years.

What are the drawbacks?+

The person under the regime cannot deduct most personal and family expenses from general IRPF. A possible severance pay will not be exempt from taxation. It raises debate about tax fairness compared to regular residents.

How is the regime applied for?+

The employee must apply directly to the Tax Agency (AEAT) using Form 149. The application must be made within 6 months from the start of the employment relationship in Spain. It is necessary to register in the census of taxpayers (Form 030) beforehand.

How is the tax return filed?+

The tax return must be filed within the annually established period (between April and June). Those who have opted for Beckham Law must file their IRPF return using Form 151.

Can the regime be renounced?+

Yes, it can be renounced voluntarily. The renunciation must be made between November and December with effect for the following year. The right to the regime is not lost by voluntary cessation to start another employment relationship or by dismissal, if the requirements are maintained.

GESTISYD Advisory for Beckham Law and Form 151

Determining if Beckham Law is the best option for your tax situation and complying with all requirements and deadlines for filing Form 149 and subsequently Form 151 can be complex. At GESTISYD, we analyze your particular situation, advise you on the suitability of opting for this inpatriate regime, manage all the paperwork, and prepare your annual returns.

Contact Experts in Beckham Law

Complete Guide to Beckham Law in Spain (Special Inpatriate Regime)