The Beckham Law is a new tax incentive that encourages high-net-worth individuals to relocate and work in Spain. It allows non-residents to pay a reduced flat tax rate of 24% on their income, instead of the progressive tax rate that residents must pay.
To qualify for this special regime, expats must meet several requirements. These include spending 183 days in Spain each year and having income from foreign sources.
Taxes
The Beckham law gives expat workers the option of paying taxes as non-residents for up to six years. The regime allows them to pay a fixed tax rate of 24% on income up to €600,000 and 45% above that limit. They also pay a reduced wealth tax. This tax regime can benefit individuals with significant wealth and a global income.
One of the disadvantages of this regime is that it does not apply to assets located outside Spain. It also does not allow the deduction of expenses or the application of most double taxation treaties. It also does not exempt employees from filing Form 720, an information declaration on assets abroad.
However, the benefits of this regime can outweigh these disadvantages for many companies. Deel can help you navigate the process of hiring international talent, from choosing the right visa and forms to working with local governments and applying the Beckham law exemption to payroll.
Immigration
The Beckham law, also known as the Special Expats Tax Regime (SETR) in Spanish, allows workers relocating to Spain to pay their property and income taxes as non-residents for the first six years. It is important to note that this option is only available if the move to Spain is a direct result of your work.
The new version of the Beckham law makes it easier to qualify for this regime, as the period of non-residence required to benefit from the tax break has been reduced from 10 years to 5. Additionally, those who provide services or carry out research and development activities in emerging entities may now be eligible, if their remuneration represents more than 40% of their other business, professional and employment income.
It is important to note that wealth tax and solidarity tax are not affected by the Beckham law, and foreigners must still report their worldwide assets. However, this option is a significant improvement over the previous situation, where foreigners who moved to Spain and spent more than 183 days a year became tax residents, paying IRPF at progressive rates that can reach up to 48%.
Work permit
Foreign workers who relocate to Spain can benefit from a favourable tax regime known as Beckham law. This allows them to pay taxes only on the incomes that they generate in Spain, which eliminates the need for dual international taxation. This is a significant advantage because it reduces the total taxable amount and saves money for the workers.
In order to qualify for the SETR, which stands for Regimen especial para trabajadores desplazados a territorio espanol, there are some requirements that need to be met. The main requirement is that the move to Spain must be a result of work-related reasons.
Those who wish to apply for this special tax regime must present a form identified as 149 within six months of starting an employment contract in Spain. In addition, they must have equity in no more than 25% of a company based in Spain and must be registered with Social Security in Spain or provide documentation that allows them to maintain their Social Security legislation of origin.
Deel’s visa mobility support
A new law has made it easier for remote workers and freelancers to move to Spain. This law, known as the Beckham law, offers a tax advantage for non-resident foreign individuals. It allows them to pay a flat rate of 24% on their Spanish income, compared to the standard tax rate of up to 45%.
This new law is a great opportunity for companies to attract global talent. However, it’s important to understand the work visa requirements of each country before hiring a remote worker. Work visa specifications vary by country, and can be difficult to navigate alone.
Workforce management startup Deel recently acquired Legalpad, a company that simplifies the work visa process for companies and their employees. This acquisition is part of Deel’s commitment to break down barriers to global hiring. It plans to integrate Legalpad’s team of mobility experts and visa application tech into its current immigration organization. In addition, it will expand its software capabilities to support more countries.spain beckham law