The increasing mobility of international talent and the strategic decisions of multinational groups continue to shape the landscape of tax planning in Spain. In this context, the so-called “Beckham Law” (Article 93 LIRPF) remains a cornerstone for attracting senior executives and key professionals to Spanish subsidiaries. However, the regime is neither automatic nor risk-free; its technical requirements demand rigorous analysis and precise implementation.
A recent binding tax ruling—DGT V0347-25, dated 19 March 2025—provides welcome clarity regarding the eligibility of foreign executives recruited as directors or country managers for newly established Spanish entities. This article examines the ruling in depth, analyzes its significance, and reflects on the best practices for structuring cross-border assignments in light of the current regulatory framework.
Case Overview: International Assignment and Tax Residency
The facts analyzed by the DGT concern a Swedish national, resident in Sweden, who is offered employment as Country Manager by a newly incorporated Spanish subsidiary within a Swedish group. The individual relocates to Spain in January 2025 and does not hold—nor will hold—significant direct or indirect shareholdings (i.e., less than 25%) in the Spanish entity. No prior Spanish tax residency is recorded for the previous five tax years.
The question submitted for binding consultation was whether the individual may apply the special expatriate tax regime (commonly referred to as the Beckham Law) as set forth in Article 93 of the Spanish Personal Income Tax Law (LIRPF).
Legal Framework and Interpretation
Article 93 LIRPF, as amended by Law 28/2022 and developed by Articles 113 et seq. of the RIRPF, regulates the optional regime for individuals who acquire Spanish tax residency as a result of an international relocation. The aim is clear: to facilitate the attraction of foreign professionals and executives, enabling them to be taxed as non-residents (under IRNR rules) for a period of up to six years (year of relocation plus five additional tax years).
The DGT, in its binding response, reiterates the following essential conditions:
- Non-Residency Requirement:
The applicant must not have been tax resident in Spain during the previous five tax years. - Causal Link Between Relocation and Employment:
The move to Spain must occur as a direct result of an employment contract with a Spanish employer.
Importantly, this excludes self-employment or freelance relationships, which do not qualify under the regime. - No Income from Permanent Establishment:
The individual must not derive Spanish-source income through a permanent establishment in Spain.
If these requirements are met, the individual may opt for the regime, being taxed as a non-resident while maintaining Spanish tax residency for legal purposes.
Practical Impact: Substantive and Formal Requirements
The DGT’s ruling reinforces the doctrinal approach that eligibility for the special regime depends both on the objective structure of the assignment and the substantive reality of the employment relationship. Specifically:
- The relocation must be triggered by a formal employment contract with a Spanish entity, and
- There must be a clear causal nexus between the international move and the assumption of professional duties in Spain.
In the case at hand, the DGT finds that the requirements are met: the executive is relocating due to a new employment relationship, there is no prior residence, and no significant shareholding exists. The fact that the Spanish entity is newly created, and that the group is foreign, does not in itself preclude access to the regime.
The ruling also implicitly underscores the importance of careful documentation and robust contractual structuring, particularly in group scenarios where incentive plans or share-based compensation may be offered (as long as thresholds are not breached).
Tax Consequences of the Regime
When the special regime applies, the following key consequences should be noted:
- Flat Rate Taxation:
Employment income is taxed at a fixed rate of 24% up to €600,000, with the excess taxed at 47%. - Taxation of Spanish-Source Income Only:
Only Spanish-source income and specific global income categories are subject to Spanish tax, providing significant planning opportunities for expatriates. - Wealth Tax and Other Obligations:
The individual remains liable for Spanish Wealth Tax on Spanish assets and is considered a Spanish tax resident for legal purposes. - Fixed Duration:
The regime applies for the year of acquisition of residence and the following five years, after which ordinary resident taxation applies.
Policy Reflections and Professional Recommendations
The DGT’s interpretation confirms that the Beckham Law continues to serve its legislative purpose: attracting global talent by offering a clear and advantageous tax regime for those relocating to Spain under qualifying employment contracts. Yet, experience shows that the regime is not without complexity or pitfalls.
Mismanagement or insufficient legal-technical analysis can result in loss of benefits or unexpected exposure to back taxes and penalties. For group HR teams, general counsel, and international executives, early engagement with specialized tax lawyers and advisors in Mallorca is essential to ensure proper compliance and optimize the tax structure from the outset.
Conclusion
The “Beckham Law” regime remains a critical instrument for facilitating international assignments to Spain, especially for executives and highly qualified professionals. The recent DGT binding ruling V0347-25 provides both clarity and a practical roadmap for multinational groups and individuals considering relocation.
However, the success of any expatriate tax strategy depends fundamentally on rigorous planning, technical accuracy, and ongoing legal support. In this area, there is no substitute for expert advice.
At Lullius Partners, our team of internationally recognized tax lawyers and advisors in Mallorca provides comprehensive support for all aspects of expatriate tax planning, cross-border employment, and compliance with the Spanish special regimes. If you or your organization are considering a relocation to Spain, we invite you to contact us for a confidential consultation.
