The Beckham Law regime regulated in article 93 of the Personal Income Tax Law, has been modified following the recent approval of the Emerging Companies Law (Startups Law). These aim to incentivise and facilitate the application of these benefits in order to attract international talent to Spain.
The first relevant change refers to the number of tax periods prior to moving to Spain that is required for the application of this special regime: it goes from 10 years under the previous rule to the current 5 years.
In relation to workers who moved to Spain, the scope of application of the rule is extended to those remote workers whose shift is not ordered by the employer, through the exclusive use of IT means and systems. This condition will be understood to be fulfilled in particular in the case of workers with an international remote working visa.
At the same time, for those posted persons who benefit from this regime due to their status as directors of an entity, the regulation now only excludes those directors who hold more than 25% of said entity in the case of an asset-holding entity (“entidad patrimonial”), whereas previously this limitation applied to all entities.
The benefits are extended to those who move to Spanish territory to carry out an economic activity classified as entrepreneurial; and also, to those who carry out an economic activity in Spain and are highly qualified professionals who provide services to start-ups, receiving from this source more than 40% of the total business, professional and employment income. The way of proving the status of highly qualified professional, as well as the determination of the requirements for qualifying the aforementioned activities, remain to be determined by further regulation.
The spouse and their children, provided that they are under 25 years of age or whatever their age in the case of disability, may also opt to be taxed under the Beckham Law regime when:
- They move to Spain with the taxpayer whose move takes place for any of the reasons mentioned above, at the same time as said move takes place or provided that the first tax period of application of the special regime has not ended.
- They acquire tax residence in Spain.
- They have not been resident in Spain during the previous 5 tax years.
- They have not obtained income in Spain through a Permanent Establishment (“Establecimiento Permanente”).
- That the sum of the taxable income of their spouse and/or children is less than the taxable income of the taxpayer who is moving.
If you have any doubts related to this or other tax, accounting, or legal issues, please do not hesitate to contact us at GM Tax Consultancy.