Spain has been a popular destination for digital nomads due to its low cost of living and relaxed culture. But what’s really drawing people to the country is a new tax benefit that has made working remotely in Spain much more affordable and beneficial than before. This law, known as Beckham Law (Spanish: “Regime especial para los trabajadores expatriados”) or the Special Expat Tax Regime (“SETR”), gives individuals who meet certain requirements the opportunity to pay a lower rate on their income in Spain for up to six years.

Normally, when you relocate to work abroad, your income is subject to the Spanish Personal Income Tax (Impuesto sobre la Renta de las Personas Fisicas or IRPF) at progressive rates of up to 48%. But if you qualify for Beckham Law, the amount of taxes you pay on your income in Spain will be limited to 24% of your total annual earnings (up to a maximum of EUR600,000).

In order to be eligible for this benefit, you must fulfill a number of requirements. First, you must be a non-resident of Spain during the ten years prior to your relocation. The non-residence requirement has recently been reduced to five years. You also must have a contract of employment in Spain that requires your travel outside of the country to perform your duties. The new rules are expected to allow more freelancers and remote workers to become eligible for the tax benefits.

The Beckham law also provides other benefits, such as a reduction in the wealth tax (Patrimonio Fiscal) to just 0.7% of your net worth. It also eliminates double taxation of your income by reducing the withholding to only 2.5%, which can be claimed as a deduction on your yearly Spanish tax return.

There are a few exceptions to the rule, including for professional athletes or company directors with more than 25% of the equity in a business (unless you are on a startup/entrepreneur visa). And while the law offers a great incentive to move abroad and work for a Spanish company, it’s still a complicated process to get your relocation approved.

If you’re interested in moving to Spain to take advantage of this new tax scheme, we can help. At Deel, our immigration experts are dedicated to making it as easy as possible for companies to hire international employees. We handle everything from selecting the proper visa to completing all necessary forms and documents, coordinating with local government offices, and applying Beckham Law to payroll. To learn more about how we can make your hiring process less complex, contact us today! spain beckham law

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