Beckham Law Calculator

How to calculate personal income tax with the Beckham Law

Imagine you move to Spain and take advantage of this law. The first thing you should know is that you are only going to pay taxes on what you earn in Spain, not on your global income. This is already a plus if you have income outside Spain.

Now, how do you calculate what you have to pay? Let’s say you earn 100,000 euros a year in Spain. With the Beckham Law, instead of using the normal progressive IRPF scales that go up the more you earn, you will pay a flat rate. For the first 600,000 euros of income, that flat rate is 24%. If you earn more than 600,000 euros, anything over that amount is taxed at 45%.

Steps to follow to calculate

It’s really easy… because all you have to do is enter your annual salary! And our calculator will automatically show you a breakdown of how much you will pay in taxes for a year, and how much you will earn net, both monthly and annually.

If you compare it with the taxes paid by any mortal in Spain, you will see that the advantages are more than obvious. However, a word of advice: this law is only profitable if your salary is higher than 50.000€. If it is less, it compensates you to pay as any other Spanish taxpayer. But if it is more… you are already late in applying the Beckham law!

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An easy example

Let’s imagine that you earn €100,000 a year. If you take advantage of the Beckham law, you will pay 24% in taxes. That is, €24,000.

If you earned that amount, but did not take advantage of the Beckham Law, you would be taxed at approximately 37%, so you would pay €37,000.

In other words, thanks to the Beckham Law you would be saving €13,000. And that is a real bundle of money. And keep in mind that the more you earn, the greater the savings.

How it works

Originally designed to attract top sportsmen (like David Beckham, hence the name… he was the first to benefit!), it is now open to other qualified professionals moving to Spain to work. What’s more: professional footballers? are now ineligible under this law due to specific regulations!

Under this law, if you take advantage of it, you will have a fixed tax rate: 24%. That’s for the first €600,000. And everything above that amount will be taxed at 47%. Compared to what normal taxpayers pay, where the percentages increase with higher incomes, this law is very attractive.

This special regime applies during the tax year in which you move to Spain and the following 5 years. After this period, you move to the regular tax regime.

Requirements

Like any law, you must meet a series of requirements in order to be eligible for the Beckham Law. In this case, the requirements to be able to apply the Beckham Law are the following:

• Not having been a resident in Spain: You must not have been a tax resident in Spain during the last 5 years before your move to Spain. This ensures that only new residents benefit.
• Employment contract in Spain: You must have an employment contract with a company in Spain. This is crucial, as the law is intended for those moving to Spain for work purposes.
• Relocation to Spain: You must move to Spain to work. This includes those who change their tax residence to Spain for work purposes.
• Filing Form 149: You must file Form 149 with the Spanish Tax Agency to officially apply for the regime. Ideally, this should be done within the first 6 months of your arrival in Spain.
• Exclusion of some professionals: Professional athletes and certain other professionals are no longer eligible for this regime due to specific regulations, as mentioned above. But I don’t think that First Division soccer players will care much.
• Limitations for directors: If you are a director of a company, you cannot own more than 24% of the shares of such company to be eligible for this regime.
• Income from Spain: Your core business and income must come mainly from Spain.

TaxDown, Beckham Law Calculation Experts

With the Beckham Law it’s all good news, or almost all good news! Because taking advantage of this law implies filling out a lot of forms and sending a lot of documentation to the Public Administration. It’s a real pain in the ass.

But we have good news! At TaxDown, the leading tax consultancy in Spain, we are experts in dealing with this law. In fact, we process a lot of them every week, both for individuals and company employees. So, if you think you can benefit from this law, don’t hesitate to contact us and we will take care of fighting with the Spanish Tax Agency, and you will only have to worry about enjoying all the savings you will save with this law!