As leading tax lawyers in Spain, we regularly advise expatriates and international professionals on the application and compliance requirements of the Spanish special expat tax regime, popularly known as the “Beckham Law” (regulated under Article 93 of the Spanish Personal Income Tax Act – IRPF). The recent DGT binding ruling V0128-25 brings crucial clarifications on the continuity of this regime in the event of employment cessation and subsequent periods of inactivity. Below, we provide an in-depth technical analysis and professional commentary on this key development.
The Context: What Is at Stake?
The “Beckham Law” is designed to attract international talent to Spain by offering a highly competitive flat tax rate on employment income for eligible individuals relocating to Spain for work purposes. However, its application is subject to stringent requirements—most notably, the regime is contingent upon the taxpayer’s continuous employment in Spain.
A frequent practical issue arises when an individual under this regime ceases their employment and experiences a period of unemployment or inactivity before securing new qualifying employment in Spain. Does a break in employment status jeopardise their continued eligibility for the special regime? And if so, how long can such a period last before the right is lost?
In ruling V0128-25, the Spanish Tax Directorate General (Dirección General de Tributos, DGT) addressed the case of a taxpayer who had lawfully entered the special regime but subsequently ceased employment and remained inactive in Spain for 24 months (two years) before seeking to rejoin the regime through new employment.
The DGT’s position is clear and unequivocal: a prolonged period of inactivity is incompatible with the objectives and requirements of Article 93 IRPF. The special regime is intended to incentivise individuals who relocate to Spain for genuine employment purposes. While the DGT acknowledges that brief periods of involuntary unemployment (such as the time required to find new qualifying employment) do not immediately result in exclusion from the regime, this flexibility does not extend to prolonged inactivity.
Specifically, the DGT found that a 24-month hiatus is excessive and incompatible with the rationale of the regime, resulting in the loss of eligibility for the special expat tax status.
Technical Commentary and Practical Implications
The DGT’s reasoning centres on the principle of continuity: The taxpayer must remain in a situation that meets the requirements of the regime, primarily being employed in Spain. A temporary and involuntary interruption (such as a short period of unemployment) may be tolerated if the individual is actively seeking new qualifying employment, but this tolerance is strictly limited.
Notably, the Spanish tax legislation and administrative doctrine have not defined an explicit maximum period for permissible unemployment or inactivity. However, this ruling sets an implicit boundary—two years is unequivocally too long. The DGT’s emphasis on the “temporary” nature of tolerated inactivity suggests that only very brief periods (likely several weeks or a few months at most) will be acceptable.
The taxpayer bears the burden of proving that any period of inactivity was both involuntary and brief, and that new qualifying employment was sought and obtained in a timely manner. Documentation, such as evidence of job-seeking activities and contracts, will be key in supporting one’s continued eligibility.
If the special regime is lost due to a prolonged period of inactivity, the taxpayer becomes fully subject to ordinary Spanish tax residency rules, which can result in a substantially higher tax burden and retrospective tax liabilities.
Expert Valuation: Lullius Partners’ Perspective
This ruling by the DGT underscores the delicate balance between the regime’s policy aims and the practical realities of the international workforce. While a certain degree of flexibility exists, it is strictly limited. In our experience advising international clients, we see a growing need for clear procedural safeguards and more predictable timelines—both for taxpayers and for HR departments of multinational groups with mobile employees.
At Lullius Partners, we recommend a conservative approach: treat any break in employment as a potential risk to the continuation of the special expat regime, and seek tailored legal advice to avoid unintended loss of this highly valuable tax benefit.
Conclusion
The DGT’s binding ruling V0128-25 sends a clear message: the Spanish special expat tax regime (“Beckham Law”) cannot be “paused” for extended periods. Prolonged inactivity—such as a two-year break—will result in exclusion from the regime, with significant tax implications for the affected individual.
For expatriates and employers alike, careful planning and proactive professional advice remain the best defences against unpleasant surprises.
If you have questions regarding your eligibility for the special expat tax regime in Spain, or require strategic tax planning for international assignments, please do not hesitate to contact our team at Lullius Partners—your trusted tax lawyers and advisors in Spain for cross-border taxation and expat solutions in Spain.
