Beckham Law & RSU

Beckham Law & RSU / Stock Options

Introduction

If you receive Restricted Stock Units (RSUs) or Stock Options, you should keep in mind that it can have significant implications for individuals subject to the Beckham Law in Spain. RSUs and/or Stock Options may be affected and there are some considerations you need to keep in mind.

1. Taxation at Vesting:

RSUs & Stock Options are typically taxed as income at the time of vesting. For individuals under the Beckham Law, the flat income tax rate of 24% would apply to the value of the RSUs at the time of vesting, regardless of their total income level.

2. Treatment as Spanish-Source Income:

RSUs & Stock Options granted by a Spanish employer or earned through employment activities in Spain are considered Spanish-source income. Therefore, they would be subject to taxation under Spanish tax laws, including the Beckham Law regime if the individual opts into it.

3. Capital Gains Tax on Sale:

If an individual sells the RSUs after they vest, any gains from the sale would typically be subject to capital gains tax in Spain. Under the Beckham Law, capital gains are generally taxed at a lower flat rate compared to regular income tax rates.

4. Tax Planning:

Timing of RSU vesting and sales can significantly impact tax liabilities. Consulting with tax professionals or legal advisors who understand both Spanish tax law and the specific implications of RSUs is crucial for effective tax planning.

5. Reporting Requirements:

Ensure compliance with all reporting requirements under Spanish tax law. This includes reporting RSU & Stock Options income on annual tax declarations and providing any relevant documentation required by the Spanish tax authorities.