In more detail

Eligibility criteria 

The following are required to qualify for this regime:

1. Applicants must become Spanish tax residents.
2. Applicants must not have been Spanish tax residents in the five years prior to their relocation to Spain.
3. Applicants must relocate to Spain for one of the following reasons: 
   1. An employment contract with a Spanish entity; 
   2. An intragroup transfer (where relocation is ordered by the employer and there is a relocation letter issued by the employer); 
   3. Digital nomad status: remote work for a foreign employer; 
   4. Appointment as a director of a Spanish entity if, in case of an asset-holding entity, the individual owns less than 25% of it; or 
   5. Performance of an "entrepreneurial activity" in Spain as an independent professional or as a "highly qualified professional" meeting specific criteria.
4. Except for the cases mentioned in point (e), the applicant must not obtain income that would be classified as obtained through a permanent establishment located in Spain. This means that under the Beckham Regime, the taxpayer cannot engage in professional activities as a self-employed worker (i.e., the applicant cannot provide services on their own).

Key tax benefits

The application of this special regime provides a series of tax advantages such as the following:

1. A flat 24% tax rate on employment income (i.e., salary) up to EUR 600,000; this will be increased to 47% on the amounts received as employment income in excess of EUR 600,000.
2. Salary income subject to such flat rates will include not only Spanish-sourced salary income but also salaries received from foreign sources.
3. On other types of income (including savings income as interest and dividends, capital gains, etc.) inpatriates will only be subject to tax on Spanish-sourced income at the applicable savings income rates of up to 30% on the amounts exceeding EUR 300,000.
4. Inpatriates will remain subject to wealth tax/solidarity tax on large fortunes only on Spanish located assets.
5. Inpatriates are exempted from the obligation to report assets located abroad to the Spanish tax authorities (Form 720).
6. Family benefits: The regime may be extended to other members of the family unit if they meet a series of requirements.

Abusive use of the Beckham Regime: red flags for the Spanish tax authorities and recent case law

The Spanish Tax Administration (STA) has intensified scrutiny of Beckham Regime applications. In this regard, the most frequently challenged situations include the following:

• Artificial corporate structures: This involves using shell companies or passive entities to simulate an employment agreement with the applicant in Spain.
• Lack of economic substance: The employing company must have adequate material and personal resources (i.e., sufficient economic substance) and must operate as a real business. The STA evaluates whether the company has material means (such as office space, equipment and infrastructure) and personal means (qualified staff) to support the employment relationship.
• Passive income disguised as salary: This means creating or using family-owned entities to pay the inpatriate a salary while the real income derives from dividends or capital gains. In addition, there are cases where management fees or indirect costs are paid as employment income, even when the underlying activity is minimal or unrelated to actual work performed in Spain.
• Reclassification of dividends as professional income: Inpatriates receiving passive income such as dividends from foreign entities in which they are the sole shareholders may be deemed by the STA to be effectively providing professional services. In such cases, the income may be reclassified as economic activity income, resulting in a breach of one of the key eligibility requirements of the Beckham Regime.
• Absence of causality: The relocation to Spain must be justified by a genuine employment reason. The employment contract must be the reason for the inpatriate's move to Spain.

In that regard, there are several recent resolutions from the economic-administrative courts upholding the denial of a taxpayer making use of the Beckham Regime. One of the cases is the Resolution dated 29 January 2025 of the Madrid Regional Economic-Administrative Court. In that case, the court upheld the denial of the Beckham Regime to a taxpayer who had used a Spanish company as a vehicle to simulate professional activity. The court concluded the following:

• The taxpayer was the sole effective provider of services, despite the company issuing invoices and appearing to operate as a real estate consultancy. 
• The company lacked independent material and personal means. It operated from the taxpayer's personal residence, had no employees and relied entirely on the inpatriate's expertise and activity. 
• The STA determined that the company served merely as a conduit to channel income that should have been declared as personal professional income. 
• The court found that the taxpayer's relocation to Spain was not causally linked to a genuine employment relationship. 
• The use of the company was deemed a simulated arrangement designed to obtain an undue tax advantage. 
• As a result, the taxpayer was taxed under the general regime on worldwide income and was also subject to a penalty of up to 150% of the unpaid tax liability.

This case reinforces the STA's "substance over form" approach and highlights the importance of demonstrating genuine economic substance and a legitimate professional rationale for relocation.

Strategic considerations

To ensure compliance and avoid setbacks during the application or audit process, the relocation and structuring process must be approached with careful planning from the outset. In particular, we recommend that taxpayers do the following:

• Document genuine relocation motives: Examples include employment contracts, job descriptions, job interview process fully documented, emails, etc.
• Demonstrate economic substance: The employing company must perform real business operations and must have personnel and infrastructure in Spain.
• Avoid overlap with personal interests: The use of family-owned entities or passive asset management vehicles must be avoided to be eligible for the Beckham Regime. In addition, it is important to align professional background with the new role in Spain.
• Exercise caution when holding roles in foreign companies where the applicant or their family members are majority or sole shareholders. In such cases, the STA may consider that services are being rendered to the foreign entity from Spain, which could jeopardise eligibility under the Beckham Regime.

Given the complexity and evolving nature of the applicable rules, it is crucial to assess each case holistically and ensure that all legal and tax requirements are met from the beginning.