Special Expatriate Tax Regime: Spain’s “Beckham Law” Explained

In this article, we explore Spain’s Beckham Law, aka the Special Expatriate Tax Regime, made famous by English soccer star David Beckham back in 2005. 

We look at how it works, how to qualify and how the law has changed over the years. Next, we weigh up the pros and cons of the Beckham Law while also looking at some alternative European tax regimes. 

What is the so-called Beckham Law?

The Beckham Law is a special tax regime in Spain which permits eligible foreigners to pay a reduced rate of income tax for a period of six years. 

The law’s official name is the Special Expatriate Tax Regime and, as its name suggests, is aimed at foreign workers in general, and HNWIs in particular, who move to Spain. 

The idea behind the law is to incentivise foreign professionals and talent to become tax residents by offering them a flat tax of 24% on annual income of up to €600,000, rather than the standard progressive tax system.

Why is it called the Beckham Law?

The Beckham Law is named after English footballer David Beckham, one of the world’s most famous soccer players.

Even if you know nothing of the sport itself, chances are you’ve heard of him and his glamourous wife, the former Spice Girl, Victoria. 

The Special Expatriate Tax Regime (Régimen Especial de Impatriados) became law in 2005.

Around the same time, Beckham was playing for the Spanish football club Real Madrid, one of the biggest teams in Europe. Beckham, therefore, became one of the first foreigners to take advantage of the regime.

Given Beckham’s high profile, the law began to receive a lot of media attention. And, since the Special Expatriate Tax Regime doesn’t exactly roll off the tongue, the media began referring to it as the “Beckham Law” instead, and so the name stuck. 

Beckham Law: Amendments

The much-publicised Beckham Law became a victim of its own success, prompting various amendments over the years. 

Subsequent changes reduced the prior non-residency period from ten to just five tax years, though it also capped eligible incomes at €600,000 (where previously there was none).

Also, in an ironic twist, a 2015 amendment to the law excluded professional athletes. This came following a string of tax scandals involving top-tier soccer players like Lionel Messi, Cristiano Ronaldo and Neymar.

In other words, from 2015 onward, David Beckham was disqualified from availing of the law which bears his name. (Though it’s a moot point anyway since his annual income would no doubt have greatly exceeded the newly-introduced €600,000 threshold.)

The most recent round of changes to the Beckham Law came in 2023, expanding the range of those who can qualify for the tax regime.

Who Qualifies For The Beckham Law?

The most recent amendment to the Beckham Law expanded the eligibility criteria to better reflect the modern remote workforce and help energise Spain’s start-up culture. 

This new list, therefore, includes contract workers, teleworkers and digital nomads, as well as entrepreneurs, investors and company directors. 

Amendments to the Beckham Law also means the regime now extends to spouses and dependents, making it far more appealing to families who are considering relocating to Spain to work. 

Contract Workers: Skilled workers relocating to work for a Spanish employer. As per earlier amendments to the law, professional athletes remain excluded (sorry Becks).

Remote Workers / Teleworkers: The law was also amended to include those who work through electronic means (i.e. via a computer), an essential amendment in line with the introduction of the country’s digital nomad visa.

Entrepreneurs: Those looking to conduct qualified entrepreneurial activity in Spain, which is deemed economically beneficial (i.e. driving innovation and creating jobs). 

Company Directors: Directors or administrators of entities, provided they are not deemed patrimonial entities (i.e. holding companies, asset management, real estate management, etc.)

Highly Qualified Professionals: Spain is eager to attract highly qualified professionals who can bolster the country’s start-up initiatives, for example, IT professionals, specialist trainers, engineers, R&D and so on.

Beckham Law Rules

The first thing you need to understand is that the Beckham Law only applies to those who wish to relocate to Spain and live there. 

To qualify for the Beckham Law, you must therefore move to Spain and become a tax resident in Spain, but you must not have been a resident there for five tax years prior to the move. 

You then make your application, which includes proof of your eligibility. 

The second most important point to keep in mind is that the move must specifically be for the purposes of work. 

Keep in mind, Spain has no problem attracting tourists. Indeed, some regions’ residents complain that there are way too many – what Spain really wants, instead, is more skilled workers who will boost its economy. 

So, for example, as a worker, you will need to provide a copy of the work contract from your Spanish employer, or a transfer letter outlining that you have been transferred to work in Spain by your employer. (Remote workers must also provide proof of their remote working status if they do not already hold a digital nomad visa.)

Company directors will also be required to provide proof of their status detailing the type of business entity they manage, while entrepreneurs will need to present a clear plan with an emphasis on creating employment in Spain. 

Beckham Law Benefits

From Spain’s perspective, the Beckham Law attracts top talent while also encouraging wealthy individuals to live, do business and spend their money in the country – but what do you get out of it?

Well, to answer that question, you need to consider what Spain was like before the law, when wealthy Spanish tax residents were liable to pay tax on all their income, local and global, at standard rates. 

Spain’s Progressive Tax System

Spanish tax (like its bureaucracy in general) can often feel overly convoluted, and its rates are also quite high. 

Like many European countries, Spain has a progressive tax system, but it differs slightly in how these rates are calculated.

In Spain, 50% of income tax is collected at a national level, with the remaining 50% is collected regionally. 

Complicating matters further is the fact that, while the national rate remains set, the regional rate varies depending on where in Spain you’re living, so, for example, if you live in Barcelona, you will be paying notably higher rates than if you lived in Madrid. 

Under the standard system, therefore, high earners can expect to pay on average 47-50% tax on their worldwide income. 

All the sunshine in the world won’t make up for that, hence the introduction of the Beckham Law.

Beckham Law Tax Benefits 

Under the Beckham Law, eligible foreign workers (and potentially their spouse and dependents) enjoy exemption on foreign-sourced income for a maximum of six years, while foreign assets are considered exempt from Spanish wealth tax. 

As for Spanish-sourced income, this is instead taxed at a much lower rate of 24% on income up to €600,000, which would ordinarily be taxed at rates of 47-50%. (Any income above the €600,000 rate, however, will be taxed under normal rates.) 

Beckham Law Drawbacks

As you can see, with the Beckham Law, the potential tax savings are quite high. 

Add to that all the lifestyle benefits of living in Spain, with the secondary benefits of EU residency. 

It’s worth pointing out, however, that moving to Spain and living there is not for everyone. Though this is a requirement to avail of this law. 

Another key point to keep in mind is timelines. 

Firstly, while the Spanish bureaucracy is not exactly known for its urgency, it nonetheless insists on a very short window in which to apply.

You have just six months to apply for the regime, either from the date you commence employment in Spain, or from the date of registration with the Spanish social security system, whichever comes first. 

And if you miss this deadline, that’s it. No extensions are available, so you forfeit your right to avail of the special tax regime and so must pay the full progressive income tax rate.

The second thing to remember is that the regime only extends for six years, after which point all your income becomes taxable under the regular progressive system at rates of up to 50%. 

So naturally, you will want to have a contingency in place to relocate your tax residency elsewhere once that period elapses. 

Depending on your circumstances, however, this may not be feasible. Moving to and from a country within a period of six years can be quite the upheaval, especially if you have young children, so you will need to consider all of this in advance.  

Finally, we have the limits on income. Under the Beckham Law, foreign-sourced income is not taxed in Spain, while Spanish-sourced income is taxed at a flat rate of 24%. 

There are two key points to consider here, however.  

Firstly, just because Spain isn’t taxing your foreign-sourced income, it does not mean the income remains tax-free – so this will largely depend on where your income is derived. 

Second, as we mentioned, the 24% rate only applies Spanish-sourced income up to an annual amount of €600,000. 

Any income above that amount will be taxed at the full progressive rate of between 47% and 50% which, depending on how much income you expect to earn in Spain, is a massive deal-breaker. 

So, there’s a pretty devilish way to remember the drawbacks of the Beckham Rule, just remember the three sixes: 

• 6 months to apply
• 6 years maximum
• €600,000 annual earnings

Once you’ve seen the mark of the taxman, you will begin to notice it everywhere. 

But you’ll also be wise to his tricks. 

Beckham Law: Other Considerations

One of the biggest criticisms of the Beckham Tax law is that it is used to lure wealthy expatriates, but the Spanish authorities then “move the goalposts” when it comes to compliance. 

While much of this can be deemed hyperbole, there is some factual basis to these claims, so here are two further points you must keep in mind. 

• Spanish tax law, in general, and the Special Expatriate Tax Regime in particular, is not as transparent as it could be, and the authorities don’t seem particularly interested in making the rules clearer. 

• Much like the soccer star it’s named for, the Beckham Law has always been in the spotlight. As such, it’s been a focal point of the political tug of war between successive left and right governments, and the resulting amendments reflect the “getting tough on X” policies of the various incumbent parties. 

So essentially what we have is a tax regime where the rules feel somewhat nebulous yet is regularly amended on political grounds. There is also a precedent for further amendments in the future, based on whichever party is in power. 

The Beckham Law remains something of a hot-button issue in Spain and a cautionary tale of what can happen when a piece of legislation becomes overly politicised. 

The fact that footballers have since been prohibited from using a tax regime named after a footballer illustrates this perfectly. It’s so absurd that it sounds like satire, except taxes are no laughing matter. 

Beckham Law: Alternative Tax Regimes

It’s important to remember that Spain’s Beckham Law is just one of several similar programmes operating in Europe. Many of Spain’s neighbours offer similar programmes, all aimed at attracting talent and wealth to their shores. 

So, if you’re looking for an attractive tax regime coupled with warm sun and a healthy Mediterranean lifestyle, you should also check out: 

• Portugal
• Italy
• Greece
• Malta

Portugal

Spain’s next-door neighbour, Portugal, has a similar programme called the IFICI.

Launched at the beginning of 2024, it replaced the previous NHR (Non-Habitual Resident) programme, which we considered to be a far more favourable programme. 

One of the main reasons for this is that the NHR eligibility criteria were much broader in scope, while the IFICI is more restrictive.

In English, the IFICI stands for the Tax Incentive for Scientific Research and Innovation. 

Much like the most recent amendments to the Beckham Law, it aims to attract skilled professionals with a notable emphasis on science, technology and innovation. 

And, as with the Beckham Law, foreign-sourced income is exempt while Portuguese-sourced income is taxed at a flat rate – 20% in this case, versus the Beckham Law rate of 24%. 

Another key difference is that the IFICI extends for ten years, versus the Beckham Law’s six years. 

So, on paper, it’s a superior offering in many respects, though much narrower in terms of eligibility. 

The IFICI is also vulnerable to the same kind of political manhandling which plagues many of Europe’s more attractive programmes, so the more time passes, the more changes are likely to be made. 

And it’s much the same story in our next country…

Italy

Like the Beckham Law, Italy’s flat tax regime was created to attract wealthy individuals to establish tax residence in the country.

The key difference here is that the flat tax applies to foreign-sourced income, while locally sourced income is taxed at standard progressive tax rates. 

Also, while Spain and Portugal’s offerings are based on a percentage of income, Italy’s flat tax regime levies a lump sum amount, which remains constant regardless of the amount of foreign income earned.  

Until recently, Italy’s offering was a far more appealing prospect, but then in 2024 the government decided to double the flat tax value from €100,000 to €200,000.

Again, this sets a worrying precedent for future government meddling, which risks making the regime less attractive in the future. 

As with Spain and Portugal, you must physically relocate and establish tax residency in the country. 

Italy’s flat tax programme, however, lasts for 15 years, versus Portugal’s ten and Spain’s six; more than enough time for non-EU citizens to naturalise, obtain an EU passport, and then move elsewhere once the 15-year period has elapsed.

Additional family members can also be added for an additional price of €25,000 per person.

Greece

The Greek flat tax system is more business-friendly compared to previous entries. 

It’s modelled quite closely on the Italian offering, but with one glaring difference, they kept Italy’s original flat tax sum of €100,000, making it far more appealing.

Adding family members is also cheaper, costing €20,000, which is €5,000 less than in Italy.  

As it’s modelled on the Italian system, the flat tax applies to foreign-sourced income only, while Greece’s progressive system applies to all income sourced within Greece. 

One final similarity with the Italian system, the Greek flat tax lasts for 15 years, though in this case, the naturalisation period is just seven years, after which you can apply to become a Greek citizen and gain an EU passport. 

Malta

Malta’s TRP/GRP regime is a popular one here at Millionaire Migrant as it offers attractive rates and enhanced mobility. 

The TRP and GRP regimes are basically identical, except that one applies to Europeans while the GRP (Global Residence Programme) applies to non-Europeans. 

In either case, you can avail of a 35% rate on Maltese-sourced income while foreign-sourced income is taxed at a flat rate of 15% – but only if it is remitted to Malta. 

The only major advantage of the Maltese system is that it’s considerably less strict in terms of residency. So, you don’t have to spend all your time in the country if you don’t want to, provided that you don’t inadvertently trigger tax residency in another country. 

Beckham Law: Key Points

• Spain’s Special Expatriate Tax Regime is aimed at attracting skilled foreign workers and investors deemed of value to the national economy. 

• It was dubbed the “Beckham Law” by the media after British soccer star David Beckham, the first high-profile individual to take advantage of the law. 

• The law was established in 2005 but has been amended multiple times by successive Spanish governments. 

• As of 2023, the law also applies to remote workers, including digital nomads, provided they meet specific criteria.

• The Beckham law offers qualified foreign expats exemptions on foreign-sourced income plus a flat tax of 24% on locally sourced income up to a maximum annual amount of €600,000. 

• Income above the €600,000 threshold is taxed at standard progressive rates, which can be as high as 50%, depending on the region of Spain you reside in. 

• Once registered within the Spanish system (either directly or on behalf of your employer), you have six months to apply for the regime before the window closes. 

• If your application is successful, you then enjoy the benefits of the tax regime for a maximum of six years, after which point you revert to the standard progressive system. 

Beckham Law: Conclusion

Tax law is much like soccer – it’s all about keeping your eye on the ball. 

Taking your eye off the ball, even for a second, can prove costly. And, of course, if you break the rules, you risk losing on penalties. 

With variable rates depending on the region, Spanish tax law is especially tricky. 

You can’t change the law, unfortunately, though you can “bend it like Beckham” by taking advantage of the Special Expatriate Tax Regime. 

The Beckham Law provides clear tax reduction benefits for a period of six years, all while you enjoy the vibrant Spanish lifestyle and the added benefits of EU residence. 

It’s vital, however, that you understand the rules first and also stay up to date with changes as they occur. 

Given how confusing, yet politically charged, the Beckham Law is, you could end up in a messy (though hopefully not a Messi) situation through no fault of your own.

So, as with all international tax matters, getting the right advice is critical.

Beckham Law FAQs

What is the Beckham Law?

The Beckham Law is a special tax regime in Spain offering exemptions on foreign income plus a flat tax rate of 24% on Spanish-sourced income for a period of up to six years. 

Officially named the Special Expatriate Tax Regime (Régimen Especial de Impatriados), it was nicknamed the Beckham Law after soccer star David Beckham, who was the first famous person to apply. 

Who can take advantage of the Beckham Law?

The Beckham Law is aimed at attracting skilled workers and investors who are considered of value to the Spanish economy, provided they have not previously been resident in Spain for the preceding five tax years.

In 2023, the law was amended to allow company directors, entrepreneurs and digital nomads to apply, expanding its appeal. 

To take advantage of the Beckham Law, you must physically move to Spain, you must do so specifically for the purposes of work, and you must subsequently become a tax resident there. 

Does the Beckham Law have an application deadline? 

Yes. You must apply within six months of either receiving your work contract or registering with the Spanish social security system (whichever happens first) in order to take advantage of the Beckham Law. 

If you miss this window of opportunity, you will not be granted an extension, and thus you forfeit your chance of gaining this tax status. 

How long does the Beckham Law last?

Spain’s Special Expatriate Tax Regime, better known as the Beckham Law, grants special tax status for a maximum period of six years.

Once the six-year period has elapsed, however, the standard progressive taxation system applies with income tax rates of between 47% and 50% for HNWIs, depending on which region they reside in. 

Does Spain have a progressive tax system?

Yes, Spain operates a progressive tax system whereby the rate of income tax rises based on the amount of income you earn. 

Is it true that Spanish income tax varies by region?

Yes. This is often confusing for expats as the Spanish income tax system (IRPF) consists of two components, a state and a regional tax. 

The state tax accounts for 50% of the income tax collected. This is done on a country-wide basis by Spain’s national government in Madrid. 

The second component is regional. Here the other half of the income tax is collected by the local government of whichever autonomous community you reside in. 

The rate of income tax you pay is therefore the sum of both the national and regional taxes.

While the national rate is set, the regional rate can fluctuate based on which region (autonomous community) you reside in. 

So, if you reside in Madrid for example, you will pay less tax than if you were in Barcelona, as the Catalan region has some of the country’s highest rates of taxation. 

What is the Mbappé Law?

Like the Beckham Law, the Mbappé Law is a Spanish tax law named for a famous football player, in this case, French soccer star Kylian Mbappé. 

Unlike the Beckham Law however, which is a nationwide tax regime, the Mbappé Law specifically applies to the Madrid region.

Officially known as Law 4/2024, the Mbappé Law is a local tax regime which applies to Spain’s Madrid region only and is purposely designed to entice wealthy individuals to establish tax residence within the Community of Madrid. 

The law offers a 20% reduction on personal income tax, which is collected at regional (but not state) level, in exchange for establishing tax residency and making a qualified investment. 

Under the law, a qualified investment can be bonds, funds or shares (but not real estate), and the entity you invest in does not actually need to be located in Madrid. In theory it can be anywhere, provided it is not in a location which the Spanish government deems a tax haven.

To qualify for the Mbappé Law, you must not have been a tax resident in Spain for a period of five tax years before establishing your tax residency in the Community of Madrid. You must then maintain this tax residence for a minimum of six years. 

In other words, the Mbappé Law is a far more specialised regime than the Beckham Law, since it is only of value to HNWIs willing to relocate to a specific region in Spain. 

It makes sense for Kylian Mbappé, however, who transferred to Real Madrid in 2024, the same year the law came into effect. 

(It also makes sense for him since, ironically, following the government’s 2015 amendments, soccer players like Mbappé are prohibited from availing of the Beckham Law.)