On June 10th, 2005 the Spanish government approved Royal Decree 687/2005 implementing the Personal Income Tax (hereinafter, PIT) regulations in relation to article 93 of the Spanish PIT Law (hereinafter, SPITL), which is commonly known as the "Beckham law" and they regulate the procedure to apply for the new Spanish tax regime for expatriates in force since January 1st, 2004.

According to this law, natural persons who acquire their tax residence in Spain as a result of being posted to Spanish territory may opt for assessment under Spanish Non-Residents Income Tax rules for a period of up to six tax years (the year in which the expatriate acquires the tax residency in Spain and the following five consecutive years) instead of under the PIT rules for resident individuals provided that certain conditions are met.

On November 27th 2014, the Government approved Law 26/2014, which modifies this regime. This law eliminates the requirement regarding the total amount derived from personal work performed in Spain that the individual should obtain. Based on the old rules, taxpayers which employment income was over EUR 600.000 would not be eligible for the special regime. With the current regulation the amount of the employment income is not relevant for application purposes. On the other hand, with the new rules, worldwide employment income would be considered Spanish sourced thus subject to tax in Spain.

Other amendments included are that professional sportsmen now are excluded of this regimen. However, the law 26/2014 includes the possibility that the company directors can apply for this special regimen as long as they do not hold stock on the company or in case they have, the shares held do not mean more than 25% on the equity.

Under the special regime, natural persons will be subject to Personal Income Tax for their worldwide employment income and Wealth Tax only in relation to the assets they own that are located in Spain. Employment income is subject to a 24% flat tax rate if the tax base is less than EUR 600.000 and 45% if it is over that amount instead to the progressive tax scale for resident individuals (ranging from 19% up to 48%, depending on the region of Spain where the taxpayer has his residence) during the year of acquisition of the Spanish tax residency and the following five consecutive tax years. Dividends, interests and capital gains from Spanish sourced are subject to taxation following a scale ranging from 19% to 23%. Income from investments that are not of Spanish sourced are not subject to income tax in Spain under this regime.


Individuals who wish to benefit from this scheme must comply with the following requirements: 

  • They must at no time have been resident in Spain during the 10 tax years preceding their arrival to Spain.
  • The assignment to Spain must be due to the signing of an employment contract with a company located in Spain or, in any case, to an assignment from a company located outside of Spain.
  • The company directors are eligible for the regime as long as they do not hold stock on the company or in case they have, the shares held do not mean more than 25% on the equity.
  • They must not obtain income through a Permanent Establishment located in the Spanish territory.

The new legislation removes the requirement that the work must be done in Spain, because since January 2015 the Spanish law presumes that all employment income earned by the taxpayer from the date of his arrival in Spain it is Spanish sourced and it is subject to taxation.

The request for application of the regime must be made through a special Form (149 Form), which must be filed to the Spanish Tax Authorities along with documentation supporting the application referred within a period of 6 months from the date on that the worker has been registered as an employee in the Social Security in Spain or from the starting date of the provision of services in Spain in accordance with the corresponding certificate issued by the Foreign Social Security when the worker maintains the contributions in his country of origin.


In summary, the main features of the new regime are as follows:

  1. The election for the new regime entails taxation as a non-resident individual for Income Tax and Wealth Tax point of view.
  2. Employment income is taxed at 24% flat rate on the gross income, not being applicable those reductions, deductions and allowances set forth for resident individuals. Employment income over EUR 600.000 would be subject to tax at 45%.
  3. Capital gains obtained in Spanish territory will be taxed at a tax rate ranging from 19% to 23%, regardless of the holding period of the asset transferred. Investment income which is not Spanish sourced it is not subject to tax.
  4. The natural person will be subject to the Wealth Tax for the assets and rights located or exercisable in Spanish territory.
  5. The taxpayer under this special regime will not be required to file the declaration Form 720 on assets located outside Spanish territory.

For more information regarding this matter do not hesitate to contact us through our website www.blaw.es or at the email address This email address is being protected from spambots. You need JavaScript enabled to view it..


International Tax & Legal Advisors.
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28010 Madrid
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