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Local Spain
13-05-2025
- Business
- Local Spain
What Americans should know about Spain's Beckham Law tax regime
More Americans than ever are looking to use the Beckham Law to move to Spain and save on taxes, but is it really as good as it seems and what do you have to be aware of if you're from the US? Firstly, let's look at what the Beckham Law is. It's a tax regime that essentially allows those who have not resided in Spain for at least the last five years to pay a flat rate of 24 percent on their income up to €600,000 per year. Tax is also only paid on income earned in Spain, instead of a progressive tax on worldwide income. The normal progressive taxes for Spanish residents range from 19 to 47 percent. It was first introduced in 2004 to attract talent and highly qualified workers to Spain with tax breaks. The law was nicknamed after the footballer David Beckham because he was the first one to take advantage of it when he moved here to play for Real Madrid. It's important to know that not all Americans will qualify for the Beckham regime. For example, if you're here on the Digital Nomad Visa and are self-employed, then you are not eligible. It will only be for those who are employed by company's abroad. This initially seems ideal - a flat tax rate and tax breaks - why would you not take advantage if you qualify? But it's important to remember that not everything is as good as seems with the Beckham Law, and there are various factors you have to take into consideration if you choose to go for it. The first factor is how much you earn. Tax expert Mark McMillan from Sun Lawyers previously told The Local Spain: 'The special tax regime will be beneficial for those with an annual income from around €50,000 up to €600,000, so it will depend on your income bracket. Note that there are no allowances for your personal circumstances and as a result, people with spouses and children may find that they will pay less tax if they do not opt for the special regime'. So, if you earn below or above those amounts the Beckham Law won't bring you any benefits at all. It's also worth noting that Americans have to continue to file their taxes in the US even when they move to Spain. Therefore, if you pay 24 percent personal income tax in Spain under the Beckham Law, then you will pay the remainder - up to 32 percent - of the federal rate in the United States. This means that while the Beckham Law still has its benefits, it's less advantageous than it is for those from other nationalities. You also have to plan carefully and be fully aware of what becoming a Spanish tax resident could mean for you. If you're an American with IRAs, 401ks or trust funds, it's important you get advice from financial and tax experts in Spain, otherwise you could end up paying a lot more taxes than you were originally led to believe. Spain's Treasury has also intensified its scrutiny of those who benefit from the Beckham Law. Javier Vinuesa and Guadalupe Díaz-Súnico, of Gómez-Acebo&Pombo law firm told El Confidencial that 'many foreigners do not understand that the same administration that granted them the regime could, years later, question it". According to them, this leads to greater problems and a higher chance of being audited and investigated. "If there's no fraud, there's no litigation, but there are many gray areas, especially with Americans," several tax experts told El Confidencial. They explain that if you have tried to force the conditions to qualify for the regime, but didn't actually qualify in truth, it could have consequences for you in the future that are worse than having paid the normal amount of tax in the first place. In fact, in recent years, law firms in London have been challenging the Beckham Law claiming that it's a 'tax trap'. Some feel the specialist tax regime has not been advantageous for foreigners and that they've been treated unfairly by the Spanish tax authorities, subject to more checks and audits. In addition, the new Social Security agreement between the US and Spain does not factor in Beckham Law complications or solutions for remote workers, meaning that it's unclear what's covered. This could also make it so that Americans are more susceptible to being audited in Spain. If you don't qualify for the Beckham Law or you feel it's not right for you, one option several lawyers advise according to El Confidencial is to the region of Madrid, which allows for a reduction in the regional income tax rate. Those considering the Beckham Law or any other tax solution, must make sure they speak with a professional as each case is unique and what is best for someone else doesn't necessarily mean it's good for you.
Local Spain
06-05-2025
- Business
- Local Spain
INTERVIEW: 'Spain's golden visa will return with a change of govt'
As of April 3rd 2025, the golden visa ceased to be an option for those wanting to gain residency in Spain by either buying property worth €500,000, investing €1 million in shares in Spanish companies, €2 million in government bonds, or transferring €1 million to a Spanish bank account. Now that this visa option is no more, what are the consequences? Have affluent non-EU nationals been left disappointed because they missed the deadline? And how are those who missed out now looking to pursue Spanish residency? The Local Spain spoke to three lawyers who specialised in the Spanish golden visa to see what's happened since. Mark McMillan from Sun Lawyers said: 'We rushed the last-minute visas through and quite a few with €1,000,000 deposited in Spanish bank accounts due to the time taken to process property purchases'. 'The disappointment with regards to the golden visa came from people who bought together with their spouses but could not apply due to their type of marital regime (separation of assets, which is the norm in the UK) and not having bought real estate for the mandatory €500,000€ each or at least in one sole name,' McMillan revealed. Immigration lawyer Mayrem Essadik, head of Marfour Law, was relieved that she managed to submit golden visa applications for all her clients before the deadline, but 'many have been forced to make the one-million-euro investment because their chosen properties are not yet ready to complete the process of purchase,' she told The Local Spain. 'We are very disappointed, as we believed that alternative investment options would remain available. In the end, many clients were left with no choice but to go with the €1 million bank investment – something that was not part of the original draft of the law,' she added. The primary reason given by the Spanish government for scrapping the golden visa scheme was the alleged impact wealthy foreigners have been having on Spain's housing market by buying up expensive homes locals couldn't afford and thus driving up prices, hence why the Barcelona-based lawyer can't understand why the golden visa's financial investment options have been cancelled as well. Essadik also highlighted another group of people who just missed out on Spain's golden visa – those who had bought off plan and whose properties were not yet complete. 'We have cases of clients who purchased properties in 2023, for example, but since the property won't be ready until June 2025, they have been affected. Although the purchase was already underway, they will not be able to qualify in time for the golden visa. This is the sad situation.' Maria Luisa de Castro from CostaLuz Lawyers told The Local she has several clients who missed out on the golden visa because they applied too late. 'Many clients contacted us too late, and given the uncertainty and tight deadlines, we chose not to take risks with timing. Unfortunately, some clients were hoping to benefit from the golden visa's advantage of not becoming tax residents in Spain, but they didn't manage to complete their property purchases in time'. Spain's visado de oro was one of the best residency options as it allowed holders to spend less than 183 days in Spain while still holding onto residency, and it didn't require them to become tax residents either. So now that the deadline has passed, what type of visa options are foreigners looking at to move to Spain? 'The non-lucrative visa (NLV) has clearly become the preferred option for many clients now,' explained de Castro. 'Many clients would have much preferred the golden visa, mainly for tax reasons. It offered them the flexibility to live in Spain without becoming tax residents — something the NLV does not allow,' she added. She also expressed that there's a growing interest in the digital nomad visa (DNV), 'although it requires meeting more specific conditions that not everyone can satisfy'. McMillan also believes that a lot of foreigners with that kind of capital needed for the golden visa have businesses or are working professionals, meaning that the DNV option open to them. 'The DNV route for people working remotely for foreign companies opens the way for access to the "Beckham's Law" (regimen especial aplicable a los trabajadores desplazados a territorio español) at a flat 24 percent tax on their salaried/invoiced incomes as a displaced worker which finally could be an extremely lucrative and tax-efficient way to live in Spain". McMillan is referring to the fact that if you work for a company abroad and get the DNV (not those who are self-employed) you may be able to benefit from the Beckham law, which means you can pay a flat tax rate of 24 percent instead of on a sliding scale. 'I am converting many golden visas to DNVs and advising a lot of people on coordinating the right setup to meet the criteria,' he explained. 'This is opening up an excellent alternative'. Nevertheless, Essadik believes that there fewer legal solutions to offer people who wish to move to Spain, and that 'the process is becoming less accessible overall'. The general consensus so far among property experts say that the abolishment of the golden visa won't have any impact on the general property market, nor on the luxury real estate sector. De Castro of CostaLuz Lawyers agrees with this view, believing that cancelling the golden visa will help Spain's housing crisis at all and believes it was a political decision. "The golden visa was not responsible for Spain's housing problems, and its cancellation has done nothing to solve them," she explained. "I'm convinced that once there is a change of government, the golden visa – or a similar programme – will return." Spain's golden visa was initially introduced by the right-wing Popular Party government of Mariano Rajoy in 2013 as a means of drawing international investments when the country was in the midst of an economic crisis. The PP's current leader Alberto Núñez Feijóo has referred to Pedro Sánchez's decision to cancel the golden visa as a "smokescreen" to help "cover up" his "incompetence" vis-à-vis housing policy.
