Beckham Law when changing jobs

Understanding the Beckham Law when moving to a new job.

Glossary

Introduction

When an individual benefiting from the Beckham Law changes jobs, several factors must be considered to determine if they can continue to benefit from the special expatriate tax regime.


1. Criteria for Continued Eligibility

  • New Employer: The new employer must be either a Spanish entity or a foreign entity with a permanent establishment in Spain.

  • Employment Nature: The new job must be consistent with the original conditions that qualified the individual for the Beckham Law. This typically means the job should be of a highly skilled nature and the individual must not have been a tax resident in Spain for the ten years prior to moving to Spain for the new role.


2. Notification to Tax Authorities

  • Requirement: The individual must inform the Spanish tax authorities (Agencia Tributaria) of their job change. This is done through the appropriate forms and within the stipulated deadlines.

  • Process: Typically, the notification is done using Model 149 (Modelo 149), which is the form used to communicate changes in circumstances under the special expatriate tax regime.


3. Re-evaluation of Eligibility

  • Assessment: The Spanish tax authorities will reassess the individual’s eligibility based on the new job. They will ensure that the new employment meets the criteria set out for the Beckham Law.

  • Documentation: Supporting documents, such as a new employment contract, may be required to demonstrate that the conditions of the new job are in line with the requirements of the regime.


4. Impact on Tax Benefits

  • Continuation: If the new employment meets the criteria, the individual can continue to enjoy the benefits of the Beckham Law, including being taxed as a non-resident at the favorable flat rate.

  • Loss of Benefits: If the new employment does not meet the criteria or if the individual fails to properly notify the tax authorities, they may lose the special tax status and will be taxed as a resident on their worldwide income.


5. Duration and Limits

  • Six-Year Limit: The special tax regime is limited to six years. Changing jobs within this period does not reset the clock. The six-year period is counted from the year the individual first became eligible for the regime.

  • Salary Thresholds: The benefits apply up to a certain income level. For income beyond this threshold, standard tax rates may apply.