The Beckham Law, officially known as the special tax regime for displaced workers, is a regulation introduced in Spain in 2005 to attract highly skilled professionals and foreign investors. Its name comes from the famous British footballer David Beckham, who benefited from this law when he played for Real Madrid.
The essence of this law lies in offering tax advantages to people who come to work in Spain. Instead of being taxed according to the regular resident system, beneficiaries only pay taxes on their income earned in Spain and enjoy a reduced tax rate. This represents a significant financial relief for those who meet the requirements.
Who can benefit?
This regime is designed for foreign workers who:
- Have recently moved to Spain.
- Have not been tax residents in the country for the past 10 years.
- Work under an employment contract with a Spanish company.
The special regime applies for a period of six years, allowing beneficiaries to enjoy these tax advantages while settling into the country.
Key advantages
The Beckham Law originally allowed beneficiaries to pay only 24% income tax (IRPF) on income earned in Spain, up to a limit. However, this regulation has been modified over time to adapt to legal and economic changes. While it is no longer as generous as it once was, it remains an attractive option.
Conclusion
The Beckham Law is an example of how a country can use tax policies to attract talent and foreign capital. Although it has undergone changes and adjustments, it continues to be relevant for many expatriate workers in Spain. With its combination of fiscal incentives and economic promotion, this law demonstrates that a strategic approach can make a difference.
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