When can you lose the Beckham Law in Spain?

Content:

The Beckham Law, whose technical name is inbound expatriates regime is a great tax opportunity for those moving to Spain to work. It allows you to pay a fixed rate of personal income tax and not to tax for the majority of income earned outside the country. However, it's not a permanent and unconditional benefit. In this article we explain you How can you lose it and What to do to avoid it.

¿What is Beckham Law?

This regime is regulated by Article 93 of the Personal Income Tax Law. It allows those who move to Spain for work to pay a fixed rate of 24% on income up to €600,000 and 47% on the excess, for a maximum of 6 years.In addition, you are only taxed on your Spanish-sourced income, with most of your foreign earnings being excluded.

How can I lose this special tax status?

Currently, there are five ways identified by the Spanish Tax Agency to lose access to this regime

1. Changing your job without maintaining the conditions

This regime only applies to employees. If you quit your job or start working as self-employed, you may lose the benefit.

2. Generating income from abroad

If you start receiving taxable income from outside Spain, such as rent, dividends, or salaries, you could lose access to the regime.

3. Compliance with the 6-year deadline

This regime has an expiration date. After 6 years from its granting, you will no longer be able to apply it.

4. Stopping being a tax resident in Spain

If you spend more than 183 days outside Spain or change your center of economic interests, you will stop being a tax resident and, as a result, lose access to the regime.

5. Non-compliance with the formal requirements

Administrative mistakes, failing to report changes, or non-compliance with your annual tax filings may lead the Treasury to revoke your inclusion in the regime.

What happens if I lose it?

You will be taxed as an ordinary tax resident in Spain:

• Progressive personal income tax (up to 47%)

• Taxation on your worldwide income

• Greater tax and administrative burden

Additionally, you may have to regularize previous tax years if a breach is detected from the beginning.

Can it be applied again?

In most cases, once you lose it, you cannot recover it. Reactivation can only be considered in very specific situations, with proper justification presented to the Treasury (AEAT).

Conclusion

The inbound expatriates regime can save you thousands of euros, but losing it can be very costly. That’s why it’s essential to get proper advice and work with a professional tax advisor.

At InnoTaxes, we help foreigners maintain the inbound expatriates regime and manage their tax matters in Spain with complete confidence.

Request a personalized consultation or check out our plans.