Spanish tax resident
The Beckham Law is only applicable to persons considered tax residents in Spain. A person is considered a tax resident in Spain if he/she is in Spain for more than 183 days in a calendar year.
Therefore, individuals who acquire their tax residence in Spain (more than 183 days in a natural year) as a consequence of moving to the Spanish territory, can opt to be taxed according to the Non-Resident Income Tax (fixed rate 24%), maintaining their condition as Spanish Income Tax payer, for the tax period in which they change their residence and become Spanish tax resident and during the 5 following tax periods, provided the individual moving to Spain complies with certain conditions.
Taxation
If the individual is eligible for the Special Tax Regime, the total amount of employment income obtained by the taxpayer during the application of the special regime will be understood to be obtained in the Spanish territory. Under the special tax regime, the percentage to be withheld on income derived from work will be a fixed rate of 24%. When the payments made by a single payer for income derived from work during the natural year exceed 600.000€, the withholding percentage applicable to the excess will be 47%.
Additionally, only dividends, interest and other capital gains obtained in the Spanish territory would be taxed in Spain at a progressive tax scale ranging from 19% to 28% (from FY2023 onwards). Other income received outside Spain would not be taxed in the Spanish territory.
When applying the Special tax regime, as the taxation is based on the non-resident income tax regulations, the net wealth tax would only take into account the assets held in the Spanish territory.
Benefits
- Only worldwide employment income is subject to taxation in Spain.
- No requirement to submit the form informing of assets held abroad.
- Regarding the Net Wealth Tax when applying the Special tax regime, the individuals would only be subject to the assets held in Spain.
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Please bear in mind that as of 2023 there has been an amendment to the Wealth Tax
Law, to consider shares held in companies representing equity in any type of entity (non-
resident entities), not traded on organised markets, which at least 50% of whose assets
consist, directly or indirectly, of real estate located in Spain, as being located in the
Spanish territory. Therefore, such shares would be understood to be assets within the
Spanish territory and be subject to the Wealth Tax.
The employment income is tax in Spain at a fix rate of 24%. Other income from foreign source would not be taxed in the Spanish territory.
In addition, under the special tax regime when an individual
owns real estate in Spain for its private use (habitual residence) or when it is not rented
(empty), there is an attributed income to be taxed which depends on the cadastral value
of the real estate applying a 1,1% or 2% to determine the taxable base.
