How attractive is the new Beckham Law for Digital Nomads
It is assumed that the new Start-up Act will enter into force next January 1st 2023 and with it the new Beckham Law for digital nomads.
One of the many tax developments of this new legislation refers to the current Spanish tax regime for expatriates. This special regime, well-known as Beckham Law (as the football player was one of the first to take advantage of this measure), allows those taxpayers who move to Spain to work and pay taxes as a non-resident for a 6-year period. Not only can be eligible for expatriates but also from 2023 onwards it will apply to entrepreneurs, investors and professionals who perform a business activity (self-employed) and want to be relocated to Spain.
Main Beckham Law modifications
The Spanish legislation modifies the expatriate tax regime and reduces from 10 to 5 years the period of non-residence in Spain prior to the year of arrival in Spain. The movement can take place both in the first year of application of the regime and in the previous year.
Article 93 of the Spanish Personal Income Tax Act regulates the special tax regime and establishes a flat tax rate of 24% for employment income up to EUR 600,000.00 and 47% above that amount. This taxation is currently in force prior to this new legislation.
Moreover, the regulations will add new reasons to apply for the Beckham Law. Up to now, only physical displacement due to an employment relationship with a Spanish company or the acquisition of director status (with less than 25% of the share capital) has been contemplated. However, from now on, it will also be allowed in the case of an employment relationship with a foreign company to be provided remotely (teleworking) in Spain. This new system is designed for digital nomads.
Furthermore, it will allow access to all administrators of Spanish companies, regardless of the participation of the share capital. If the company has the status of a holding company, then the text of the regulations requires the participation of less than 25% of the share capital.
It also contemplates performing an economic activity in Spain qualified as an entrepreneurial activity, that is, in aim of the innovation with particular economic interest for Spain and for those who carry out an activity by a highly qualified professional who provides services to companies or carries out training activities, R+D+I (Research and Development and Innovation) may also be eligible.
In addition, the new legislation extends the special tax regime to the spouse and children under 25 years of age (or of any age if they are people with disabilities) displaced with the taxpayer or later (if it occurs during the first year of residence of the taxpayer).
Finally, it is essential to know that there is a 6-month period to apply for the special tax regime since the registration date at the Spanish Social security system.
In light of the above, taking into account the whole new Beckham Law for Digital Nomads, if you are interested in coming to Spain from 2023 onwards, we strongly recommend contacting a tax advisor to apply successfully for this special tax regime.
Sobre el autor: