The special inpatriate tax regime (commonly known as the “Beckham Law”) grants highly skilled workers, professionals, entrepreneurs and investors who relocate to Spain favourable personal income tax treatment. Under Article 118.1 of the Spanish Personal Income Tax Regulations (RIRPF), however, any taxpayer who opts into this regime and then fails to maintain its conditions is automatically excluded as of the tax year in which the breach occurs. A key question arises when the relationship that triggered the inpatriate status ends—either through termination of employment or resignation from an administrative post—and is followed by a period of inactivity before a new qualifying engagement begins.
In its binding ruling V1388-24 of June 12, 2024, the DGT (Spanish General Tax Directorate) examined the scenario of an individual who had benefited from the Beckham Law since starting employment with a Spanish company, but whose contract was later terminated by an objective dismissal on organisational grounds. That contract contained a six-month post-contractual non-compete obligation, after which the taxpayer expected to accept a fresh offer from another Spanish employer. Drawing on earlier rulings (V0432-17 and V1739-17), the DGT acknowledged that a literal reading of the Regulations would exclude anyone momentarily unemployed. However, it emphasised that the regime’s purpose—to attract talent to Spain—is not undermined if, for reasons beyond the taxpayer’s control, there is a short interlude of unemployment before a new qualifying engagement begins. Consequently, the six-month inactivity was deemed “transitory and irrelevant” for exclusion purposes.
A similar position was taken in ruling V1482-20 of May 20, 2020. There, an impatriate resigned voluntarily and entered negotiations with a prospective employer who ultimately hired another candidate. The applicant registered with the Spanish Public Employment Service for one month and, after four further months, secured new employment. The DGT found that this five-month gap likewise did not jeopardise the continued application of the Beckham Law regime.
By contrast, in its most recent ruling V0128-25 of February 12, 2025, the DGT addressed a case where, following the end of an ordinary employment contract, a 24-month non-compete and non-solicitation covenant applied. During that two-year hiatus—despite the taxpayer remaining resident in Spain and receiving annual compensation paid in monthly instalments—the absence of any active service relationship for such a prolonged period was not considered “transitory.” Thus, the regime was rendered inapplicable for the duration of the two-year inactivity. The DGT did, however, clarify that if the taxpayer had initiated a new qualifying employment or administrative role concurrently with the non-compete payments, the inpatriate regime could have been maintained.
At Lullius Partners—your go-to Beckham Law Lawyers in Spain and Tax Lawyers in Spain—we believe these rulings underscore two fundamental principles: first, the Spanish tax authorities will interpret short, involuntary unemployment gaps liberally in order not to frustrate the attraction of international talent; and second, any inactivity must be genuinely transient (typically under a year) to fall within that safety zone. We recommend that any expat facing a non-compete period or similar interlude engages early with specialised tax counsel to map out the timeline and structure any post-employment clauses so as to preserve their Beckham Law status.
If you are considering a move to Spain under the Beckham Law or are navigating the end of an expat-qualifying role, our team of market-leading Private Wealth and Tax Litigation experts is here to guide you every step of the way.
