Beckham Law: tax reform for non-residents in Spain

By: Transfer Business Administration Services Spain

The “Beckham Law” (Royal Decree 687/2005) is a Spanish tax law that passed in June 2005. The law gained its nickname after soccer player David Beckham became one of the first foreigners to take advantage of it. The main aim of the law was to attract much needed brain power and lure high-earning foreign workers (expatriates) to come and work in Spain to stimulate the economy.  

Before the Beckham Law, any individual spending 183 days or more during a tax year in Spain was deemed to be a Spanish tax resident, which meant they were liable for Spanish tax on a worldwide basis, not just their Spanish source income and assets.

With the Beckham law, an expatriate can choose to being taxed as a Spanish resident or as a non-Spanish resident. By electing to be taxed as a non-Spanish resident, an expatriate will under the Spanish Non-Resident Income Tax rules, only be taxed on Spanish income and assets, and not on a worldwide basis. Furthermore, the expatriate will be subject to a flat rate of 25% on his salary income, instead to the progressive tax scale for resident individuals, which ranges from 24% up to 43%. Note that the taxpayer gets no personal allowances or other deductions from gross income under this option and thus for lower earners it does not always result in a lower tax burden. The exemption applies in the year of arrival and for the following 5 years, for a total of 6 years.


  • The expatriate must not have resided in Spain in the previous 10 years prior to settling in Spain
  • The expatriate must have relocated to Spain to take up employment with a contract, and the employer must be a Spanish corporate entity, or a non-resident company operating through a permanent establishment in Spain
  • Employment duties must be carried out in Spain. When working outside of Spain, the percentage of income earned from these activities may not exceed 15%.
  • The application must be made within 6 months of starting the employment contract.

Amendment as per 2010 for new applicants earning over 600,000 per year:
In 2009, an amendment has been approved to the Beckham law. From January 1, 2010, new applicants earning more than 600,000 Euros per year, will be taxed according to the general rules up to 43%. So for people, already in Spain before January 2010, and for people earning less than 600,000 Euros per year, nothing changes in the application of this special regimen.

Transfer BASE has extensive knowledge of the Spanish fiscal system and the tax filing process in Spain. We provide advice for our clients on their tax obligations and keep them informed about major changes in the Spanish tax environment. Would you like to receive more information on how we can assist you with your tax return? Please contact us.