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If you are considering living and working in Spain, this article might help you to save some money. Because there is nothing worse than paying taxes. But luckily for all foreigners, the Spanish tax system creates great opportunities for savings. And that is what we are going to explain throughout this article: a special tax regime that can help you avoid paying taxes in Spanish territory. Thus, we will delve into everything you need to know about the Beckham Law in Spain and how to easily request it.

 

What is the Beckham Law?

The Beckham law in Spain or the law of expatriates is a special tax regime that allows foreigners who move to Spanish territory to pay a fixed tax rate of 24% only on the income they obtain in Spain, instead of a progressive tax on the income earned worldwide (19-45%).

 

So, basically, this expatriate tax regime makes it possible to end up paying much lower taxes, saving huge amounts of money. It allows all those workers residing abroad who want to come to work in Spain to pay their wealth and income taxes for the first 6 years like if they are non-residents.

 

This is regulated in section 93 of the Spanish Income Tax Law, and was published in 2004.

 

It is a measure whose main purpose is to attract talent and highly qualified workers to Spain. Its common name comes from the famous footballer David Beckham, the first to benefit from it.

 

The expats can pay much less during their first 6 years in the country. Under the Beckham law, it doesn't matter if you spend more than 183 days in the country (which is why you become a tax resident), you will pay taxes under very similar tax rules as non-residents.

This basically means that you only pay income tax on the income you earn in Spain.

 

Also, instead of paying this tax at a progressive rate that grows as your income increases, you pay a fixed rate of 24% up to the amount of 600,000 euros. In the event that income exceeds the maximum amount, a fixed rate of 45% will be charged.

Thus, the Beckham Law is undoubtedly a great tax advantage in terms of tax savings. Well, this constant 24% is much lower than the Spanish rates applied to residents, which can be up to 45%.

 

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  • 2 weeks later...

But please! pay attention that there are some drawbacks with this law as well, for example, if you are dismissed you can't enjoy tax-free compensation, it will be taxable by 24% in any case.

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