The Beckham Law in Spain: Possible expat exemption from wealth tax in Spain
Spain’s Beckham Law offers qualifying foreign workers a flat 24% income tax rate—significantly lower than Spain’s progressive tax system, which can reach up to 47%.
Tax consultants in Spain suggest that for many U.S. expats, this rule, when paired with U.S. tax benefits, can result in lower overall tax obligations than they would face back home. But who qualifies, how do you apply, and what steps should you take to optimize your tax situation?
Key Takeaways
The Beckham Law applies a 24% flat tax on Spanish-sourced income up to €600,000.
Income exceeding this threshold is taxed at 47%.
It exempts qualifying expats from paying wealth tax in Spain on worldwide income, including foreign capital gains, rent, dividends, and investments.
The rule applies for six years but does not allow for certain personal or family deductions.
Freelancers and remote workers for foreign companies do not qualify, except under specific conditions.
Application deadline: Six months from the start of employment in Spain (not from arrival).
What Is the Beckham Law?
The Beckham Law (Spanish Royal Decree Law 687/2005) is a tax regime designed to attract highly skilled professionals to Spain. Initially created to incentivize foreign employees, it gained international attention when football legend David Beckham became one of its early beneficiaries after joining Real Madrid.
Under this regime, qualifying workers in Spain are taxed only on Spanish-sourced income at a flat rate of 24%, rather than being subject to Spain’s progressive tax system on worldwide income. This makes it particularly advantageous for high-income earners relocating to Spain for work.
Notably, professional athletes have been excluded from the Beckham Law since 2015.
Who Qualifies for the Beckham Law?
The Beckham Law is not available to everyone. To qualify, you must meet the following criteria:
Employment in Spain: You must relocate to Spain for work under a contract with:
- A Spanish company
- A Spanish subsidiary of a foreign company
- A recognized startup or research institution
- Residency: You must become a Spanish tax resident (spend more than 183 days per year in Spain).
- Work Performed in Spain: At least 85% of your work must be conducted within Spanish territory.
Who Is Excluded?
- Freelancers and autónomos (self-employed individuals) do not qualify, unless they work for an approved startup or innovation-based company.
- Professional athletes.
- Individuals who were Spanish tax residents within the past five years.
- Business owners with more than 25% ownership in the company employing them, unless under a startup or entrepreneur visa.
Tax Benefits Under the Beckham Law
- Flat 24% Income Tax: Applies to Spanish-sourced employment income up to €600,000.
- 47% Tax Rate: Applies to Spanish-sourced income exceeding €600,000.
- Exemption from Worldwide Income Tax: Foreign-earned income (employment, capital gains, dividends, rental income, etc.) is not subject to Spanish taxes.
- No Foreign Asset Reporting: Unlike regular Spanish tax residents, Beckham Law users are exempt from Spain’s Modelo 720 foreign asset declaration requirement.
What Income Is NOT Covered?
🚫 Spanish-sourced inheritance, capital gains, and gifts are still subject to Spanish taxation.
🚫 Foreign-sourced employment income is exempt—so you do not need to rely on Spain’s double taxation agreements to avoid double taxation.
Applying for Beckham Tax Treatment
The Beckham Law is not automatic—to benefit from exemption from wealth tax in Spain on worldwide income, you must apply within six months of starting employment in Spain.
Application Steps:
- Obtain a Spanish employment contract.
- Apply for an NIE (foreigner identification number).
- Secure (or apply for) a Spanish residence permit.
- Register with Spain’s tax office (Modelo 030).
- Apply for a Spanish Social Security number.
- Submit Modelo 149 to elect Beckham Law tax treatment.
- Receive confirmation and provide it to your employer.
Important: The application review process can take up to two months. Missing the six-month deadline may result in permanent ineligibility.
How Does the Beckham Law Interact With U.S. Taxes?
As a U.S. citizen, you must still file U.S. taxes due to the worldwide taxation system. However, you can use various U.S. tax benefits to reduce or eliminate double taxation:
✔ Foreign Earned Income Exclusion (FEIE): Excludes up to $130,000 (in 2025) of foreign-earned income from U.S. taxation.
✔ Foreign Tax Credit (FTC): Allows you to credit Spanish taxes paid against U.S. tax obligations.
✔ Foreign Housing Exclusion: Credits a portion of foreign housing expenses.
✔ Totalization Agreements: Prevents paying into both U.S. and Spanish social security systems simultaneously.
Special Consideration: Since the Beckham Law exempts foreign-earned income from Spanish taxes, the Foreign Tax Credit (FTC) may not be fully usable for U.S. expats, making tax planning essential.
Final Thoughts: Is the Beckham Law Right for You?
The Beckham Law can provide significant tax savings, especially for high-income earners relocating to Spain for work. However, it is not always the best option for lower earners due to the loss of personal deductions.
At Landcross Partners, we specialize in helping U.S. expats navigate Spanish taxation, visas and legal matters. If you’re considering relocating to Spain from the USA, we can help you determine whether the Beckham Law is the best choice for your tax situation.
