Tax benefits for German expats: the Beckham Law

The relocation to Spain of foreign professionals, executives and investors opens the door to one of the most attractive tax incentives in the country: the Special Regime for Posted Workers, popularly known as the "Beckham Law". For many German citizens who settle on the Mediterranean coast, understanding this regime can mean very significant tax savings during their first years in Spain.

What is the Beckham Law?

It is an optional tax regime that allows people who move their residence to Spain to be taxed under the Non-Resident Income Tax (IRNR) during the year of the change of residence and the following five tax years, instead of under the general personal income tax (IRPF). In practice, the taxpayer resides in Spain but keeps, for tax purposes, treatment close to that of a non-resident on a large part of their income.

The main advantage: a flat 24% rate

Under this regime, employment income earned in Spain is taxed at a flat rate of 24% up to €600,000 per year (and 47% on the excess), instead of the progressive IRPF scale, which can exceed 45%–50% in the top brackets. For medium and high salaries, the difference compared to ordinary taxation is considerable.

In addition, as a general rule, foreign-source income (except employment income) is not taxed in Spain, which is especially relevant for those who keep investments or assets in Germany.

Requirements to qualify

1. Not having been a tax resident in Spain during the five tax periods prior to the relocation.
2. That the relocation takes place for a qualifying reason: an employment contract, appointment as a company director, the creation of an entrepreneurial economic activity, or the exercise of an activity by a highly qualified professional.
3. Not obtaining income through a permanent establishment located in Spain, except in the cases expressly permitted by the regulations.

Deadlines: a detail not to be overlooked

The option for the regime must be exercised through Form 149 within a maximum period of six months from the start of the activity recorded in the Social Security registration. Missing this deadline means giving up the regime for the entire period, so planning ahead of the move is essential.

Is it always worth it?

Not in every case. The regime is very advantageous for high employment income, but it may not be optimal for someone with substantial Spanish-source income other than employment, or who wishes to take advantage of certain general IRPF deductions. Each situation requires an individual analysis comparing both scenarios before making the decision.

At Eurofiscal we analyse your specific case, assess whether applying for the regime is right for you, and handle all the paperwork so that your arrival in Spain is tax-efficient and secure from day one.