The Spanish Income Tax Regulation, published in December 2023, has introduced relevant changes to the inpatriate tax regime, that we would like to comment on in this article.
Before going into detail, a brief overview: Currently the Beckham Law applies not only to employees, but also to company directors with controlling rights over the company, entrepreneurs, highly qualified professionals, digital nomads and remote workers as well as workers, who carry out training, research and development activities. Furthermore, children under 25 and the spouse or partner of the taxpayer may also benefit from these tax incentives. Under this regime, income from work or economic activities of up to EUR 600,000 is taxed at a fixed rate of 24 %.
One of the changes that has come at the hand of the Income Tax Regulation aims at the promotion of entrepreneurship in Spain: the regulation defines the term “entrepreneurial activity” (actividad emprendedora) as any activity of an innovative nature or of special economic interest for Spain. To qualify for the inpatriate tax regime in this modality, a favourable assessment by the National Innovation Company (Empresa Nacional de Innovación, ENISA) is required, as well as the residence permit for the exercise of the entrepreneurial activity.
Another option is to be recognised as highly qualified professional. This classification is granted to professionals with relevant degrees or who work in key sectors such as research, development and innovation. Obviously, the academic qualification and residence permit (this applies especially to professionals from third countries) must have been obtained prior to moving to Spain. In addition, candidates require a certificate issued by the company or institution they are going to provide their services to, which prove that the legal requirements are met.
Finally, we would like to highlight that inpatriates in Spain may apply this tax regime retroactively, if they have acquired their tax residence in Spain in 2023 due to moving to Spain in 2022 or 2023 before the ministerial order passing the new application form entered into force. The application deadline for this tax regime is six months, starting on 16 December 2023. In any case, we recommend seeking professional tax advice regarding the application of this transitional provision, in order to determine the conditions for its correct application.
In short, the Beckham Law is an opportunity for Spanish companies to attract talent to our country, and this against the backdrop of the currently particularly complex situation for recruiting highly qualified professionals in Europe.