If you are a foreign freelancer and plan to work in Spain, the Beckham Law brings tax advantages if you move to our peninsula to start up a business. In this guide we explain what the Beckham Law is, what the requirements are to take advantage of it and everything you need to know to save tax on your tax return.
What is the Beckham Law and who benefits from it?
The Beckham Law, also known as the special regime for impatriates, is a Spanish tax law created in 2005. It is designed to attract foreign talent to Spain and brings significant tax benefits to those who move to work in the country.
But why is it called the Beckham Law? Yes, the answer is just what you’re thinking: it was named after footballer David Beckham, who moved to Spain to play for Real Madrid and already then took advantage of the tax benefits of this law.
The truth is that, although it was originally designed for sportsmen and women, today it is open to qualified professionals, managers and, yes, foreign self-employed people.
The Beckham Law benefits:
- Foreigners who want to move to Spain for work purposes.
- Self-employed people who want to establish their business in Spain.
- Qualified professionals (such as engineers, doctors or consultants).
In short, if you are thinking of moving to Spain to work as a freelancer or employee, the Beckham Law can help you pay less tax.
Key tax benefits for foreign self-employed under the Beckham Law
The main attraction of the Beckham Law as a special regime for workers posted to Spanish territory is the tax advantages it offers to entrepreneurs. If the requirements are right, you will get all these advantages:
Reduced income tax.
Under the Beckham Law you do not pay personal income tax (IRPF) at the normal progressive rate (which is up to 47%). Instead, you pay a flat rate of 24% on your income in Spain (up to 600,000 euros). If you exceed this amount, the rate already rises to 47%.
Exclusion from taxation on foreign income
Unlike normal tax residents in Spain, who are taxed on their worldwide income, under the Beckham Law you will only pay tax on the income you generate in Spain. This is great if you have foreign income (you are not taxed on it).
Model 720 exemption
The dreaded Modelo 720, which requires you to declare property and assets abroad, does not apply if you are under the impatriate regime. What does this mean with the Beckham law? It means less paperwork and less risk of fines for not declaring your assets outside Spain.
Wealth tax advantages
In many regions of Spain there is a Wealth Tax, which is levied on personal assets. The good news is that, under the Beckham Law, you will be exempt from declaring your assets located outside Spain, which can represent a big saving. See all the benefits:
| Tax benefit | Description |
| Personal income tax reduction | Fixed rate of 24% on income up to 600.000€ |
| Exclusion of foreign income | You are only taxed on income generated in Spain |
| Exemption from Form 720 | You do not have to declare assets abroad |
| Advantages in Wealth Tax | You are not taxed on your assets outside Spain |
Thanks to the special regime for posted workers, you can improve your tax situation considerably if you work in Spain under the new Beckham Law.
Eligibility for the Beckham Law
Not everyone can benefit from the Beckham Law regulations. To benefit from this model 149 of the Beckham Law, you need to meet certain specific requirements:
Not having been a tax resident in Spain in the last 5 years.
This is one of the most important requirements of the special regime for impatriates. You must not have been a tax resident in Spain in the 5 years prior to applying for the relief.
Relocation for work reasons
You must have come to Spain for work reasons, which includes both employment and self-employment, i.e. if you are self-employed.
Special conditions for self-employed persons
If you are self-employed, you must comply with the following conditions of the special regime applicable to workers posted to Spanish territory:
- Your activity must be related to qualified or technological sectors.
- Demonstrate that you have contracts or clients in Spain that justify your residence here.
In short, it is not enough to move to Spain and do nothing else. In fact, you have to do it for specific employment reasons and fulfil the above conditions to qualify for the special regime applicable to posted workers in Spanish territory.
Procedure to apply for the Beckham Act
If you are wondering how to apply for the Beckham Law, see step by step what you need to do:
Steps to follow to apply for the scheme.
The Beckham Law requirements are only 3 important points:
- Registering with Social Security: the first thing is to register with Social Security.
- Application for the regime: then, you must apply for the special regime for impatriates through form 149 at the Tax Agency (AEAT).
- Filing Form 151: once the regime has been approved, you must file Form 151 with the AEAT to declare your taxes annually.
With these 3 points covered, you will have successfully applied for the Beckham Law.
Forms to file with the Tax Agency
There are two main forms you need to file with the Tax Agency:
- Form 149: the application for the tax regime.
- Form 151: the tax return under the special regime.
See the following table with the necessary forms and take them into consideration:
| Model | Description |
| Form 149 | Application for the Beckham Law tax regime |
| Form 151 | Annual income tax return under the impatriate regime |
These forms are key to qualifying for the special income tax regime, so be sure to take them into account when applying as an impatriate.
Duration of the Beckham Act tax regime
The Beckham Law tax regime does not last forever and you cannot take advantage of it for your expatriate tax return. It has a time limit:
Time limits and renewal of the regime.
The scheme lasts for 6 years from the time you register with Social Security and apply for the scheme. There is no possibility of renewal once these 6 years have elapsed, but during that time you will enjoy the tax advantages with the Beckham Law for Spaniards.
Special cases: digital nomads and highly qualified freelancers
Since the start of self-employment, many digital entrepreneurs and skilled freelancers are moving to Spain. While the Beckham Law used to benefit employees, it is now open to freelancers and people with highly specialised professions.
So, if you are one of those impatriates and work remotely or are a freelancer with international clients, the Beckham Law could be an excellent option for you!
Disadvantages of the Beckham Law : What you should consider
Although the Beckham Law offers many advantages, it also has its limitations. Don’t forget to pay attention to the weaknesses before deciding anything about it.
Exclusions from the regime
The scheme does not apply to:
- Workers who have been residing in Spanish territory for at least 5 years.
- Workers posted by companies operating mainly outside Spain.
Pay attention to these points!
Limitations on tax deductions.
Under the Beckham Law, you will not be able to apply some tax deductions available to normal tax residents in Spain. For example, you will not be able to deduct expenses for housing or investment in new businesses if you qualify for the special income tax regime.
Here is a quick summary of the main disadvantages of the Beckham Law:
| Disadvantage | Description |
| Exclusion for previous residents | If you have been resident in Spain for at least 5 years, this law is not for you. |
| Limitations on deductions | You will not be able to access some tax deductions available to residents. |
It is important to be aware of these disadvantages to avoid surprises in the future.
Comparison of the Beckham Law and the general tax regime in Spain
Here is a quick comparison between the Beckham Law regime and the general taxation regime in Spain:
| Appearance | Beckham Law | General regime |
| Tax rate | 24% up to £600,000; 47% if above that amount | Up to 47% on all income |
| Foreign income | You are not taxed on it | You must declare and be taxed on worldwide income |
| Tax deductions | Limited | Access to all available deductions |
With this comparison table, you can clearly see how the Beckham Act offers you advantages that the general regime does not. Consider the strengths and weaknesses of this legislation.
Frequently asked questions about the Beckham Law
Does the Beckham Law apply to sportsmen and freelancers?
Yes. Although originally created for sportsmen and women, the law has been extended to include freelancers and other posted workers.
How much can you save under the Beckham Law?
It depends on your income, but the savings can be considerable if you have a high income, as you will pay a flat 24% instead of the 47% you would pay under the general regime.
How does the Beckham Law affect foreign income?
Under the Beckham Law, you will not have to pay tax on your income generated outside Spain, which is a great advantage for freelancers with international clients.
Conclusions
The Beckham Law is an option if you are a foreigner moving to Spain for work purposes. It has tax advantages such as paying less tax on your income in Spain and not being taxed on your foreign income. However, it also has its disadvantages (which you should be aware of). First, make sure you meet the requirements to apply!
