Individuals who acquire their tax residence in Spain as a result of moving to Spanish territory for work can opt to be taxed under the rules for non-residents of Spain for tax purposes.
This special tax regime, which is only available for a period of 6 years, is subject to certain requirements and is only applicable to employees, i.e. as a result of an employment contract with an employer in Spain, in accordance with Articles 113 to 120 of the Personal Income Tax Regulations.
The applicable period of 6 years comprises the first calendar year in which the new resident stays more than 183 days in Spain (i.e. when he/she becomes a tax resident in Spain), plus the following 5 years.
Only those who, during the 10 years prior to the move, have not already been tax residents in Spain can benefit from this regime. Likewise, hiring by a permanent establishment located in Spanish territory would not be taken into account as an employer in Spain.
This regime, also known as the Beckham Law, entails taxation only on income obtained in Spanish territory, i.e. on earned income from the date of arrival in Spain until the date of notification of departure. The rates are 24% for the first 600,000 euros and 45% on the remainder above that amount.
On the other hand, it is possible to renounce this regime, as long as it is done during the months of November and December prior to the beginning of the following calendar year. However, if you do so, you will not be able to opt for it again.
Finally, you should be aware that this special regime is not compatible with the status of resident for the purposes of the Double Taxation Conventions and the right to their benefits, so you will not be able to apply the concept of tax resident in your State of origin, of which you are no longer an effective resident. This means, mainly, that you will not be able to apply for a tax residence certificate in that State, but in Spain, where you are resident.
It is highly recommended that you contact expert tax advisors because, depending on the Autonomous Community to which you are moving, the tax reductions for the application of this regime could be up to 50%.
