The Central Economic Administrative Court (Tribunal Económico-Administrativo Central, TEAC) has delivered a landmark decision clarifying a controversial aspect of the Spanish impatriates regime. In Resolution 00/03697/2025/00/00 of 17 July 2025, issued in unification of criterion and classified as doctrine, the TEAC confirms that taxpayers who opt for the special tax regime for workers displaced to Spain under article 93 of the Spanish Personal Income Tax Law (IRPF) must include imputed income derived from urban properties located in Spain, even where the property constitutes their main residence.
The ruling resolves divergent approaches adopted by regional economic administrative tribunals and has immediate practical consequences for individuals benefiting from the so called Beckham regime.
1. Background and factual context
The case concerned Spanish Personal Income Tax for tax year 2020. The taxpayer, an individual who had moved to Spain and opted for the special impatriates regime under article 93 IRPF, filed her tax return using form 151. In that return, she declared as her habitual residence a property owned by her in the Community of Madrid.
Following a limited tax audit, the Spanish Tax Agency imputed notional real estate income in respect of that property, on the basis that it constituted an urban property not used in an economic activity. The taxpayer challenged the adjustment, arguing that, as the property was her main residence, no imputed income should arise.
2. Taxpayer’s position
Before the Regional Economic Administrative Tribunal of Madrid (TEAR), the taxpayer maintained that the imputation of notional income on her habitual residence was incompatible with the principle of ability to pay. She argued that the rationale of imputed income lies in the existence of a real or potential yield that the owner chooses not to realise, typically by letting the property. That rationale, she submitted, does not apply to a main residence, which merely fulfils a basic housing need and does not generate any real or potential income.
She relied on article 85 IRPF, which expressly excludes the habitual residence from imputed real estate income, and on recent case law of the High Court of Justice of Madrid that had accepted this interpretation for taxpayers under the impatriates regime.
The TEAR upheld her claim and annulled the imputation.
3. Position of the Tax Authorities and extraordinary appeal
The Spanish Tax Agency, through the Director of the Department of Tax Management, lodged an extraordinary appeal for unification of criterion before the TEAC.
The Administration argued that taxpayers under article 93 IRPF determine their tax liability by reference to the rules of the Non Resident Income Tax (IRNR), pursuant to article 93.2 IRPF. Under article 13.1.h) of the IRNR Law, imputed income derived from urban properties located in Spain and not used in an economic activity is deemed to be Spanish source income, without any exception for the taxpayer’s main residence.
The Administration further contended that the reference made by article 24.5 IRNR to article 85 IRPF is limited strictly to the quantification of the imputed income, not to the definition or exclusion of the taxable event. In its view, the impatriates regime is optional and must be applied in full, both in its favourable and unfavourable consequences. Selective application of IRNR and IRPF provisions is not permitted.
4. Legal framework: article 93 IRPF and the interaction with IRNR
The TEAC begins by recalling the legal nature of the impatriates regime. Taxpayers covered by article 93 IRPF acquire Spanish tax residence under the general rules but may opt to determine their Personal Income Tax liability in accordance with the rules of the IRNR, subject to specific exceptions expressly listed by the legislator.
This option implies a fundamental shift in the structure of taxation. Instead of being taxed on worldwide income under a personal and progressive tax adjusted to personal and family circumstances, the taxpayer is taxed only on Spanish source income, under a system that is not designed to reflect personal circumstances.
The delimitation of Spanish source income is therefore governed by article 13 IRNR, which expressly includes imputed income derived from urban properties located in Spain, except where the property is used in an economic activity.
5. The decisive distinction between taxable event and tax base
A central element of the TEAC’s reasoning is the strict conceptual distinction between the taxable event and the tax base.
The Tribunal emphasises that article 13.1.h) IRNR defines the taxable event by reference to the mere ownership of an urban property in Spain not used in an economic activity. The law does not provide for any exclusion where the property constitutes the taxpayer’s habitual residence.
By contrast, article 24.5 IRNR governs the determination of the tax base and merely refers to article 85 IRPF for the purpose of quantifying the imputed income. That reference cannot be used to alter or narrow the scope of the taxable event itself.
In the TEAC’s view, interpreting the reference to article 85 IRPF as importing the exclusion of the habitual residence would amount to confusing the definition of the taxable event with the rules for its quantification, which would be legally incorrect.
6. No legal gap and no scope for analogy
The Tribunal expressly rejects the argument that the absence of an exclusion for the habitual residence in the IRNR constitutes a legislative gap.
According to the TEAC, the structure of the impatriates regime demonstrates that the legislator did not make a blanket reference to the IRNR but selectively excluded certain provisions where appropriate. Had the legislator wished to exclude the habitual residence from imputed income under the special regime, it could have done so expressly.
The Tribunal also rejects any analogy with the IRPF on the basis of article 14 of the General Tax Law, noting that tax benefits and exclusions must be interpreted strictly and cannot be extended by analogy.
7. Rejection of constitutional argument
The TEAC further addresses and dismisses arguments based on constitutional principles, including equality and ability to pay.
It notes that taxpayers taxed under the general IRPF regime and those who opt for the special impatriates regime are not in a comparable legal situation. The latter benefit from a generally more favourable regime, justified by economic policy considerations, but one that deliberately departs from the personal and family adjustments inherent in the IRPF.
The option to apply article 93 IRPF therefore requires a holistic assessment by the taxpayer of all its consequences. The system does not allow taxpayers to cherry pick favourable aspects of both regimes.
8. Decision and unification of criterion
The TEAC upholds the extraordinary appeal lodged by the Tax Authorities, annuls the decision of the TEAR of Madrid and fixes the following binding criterion:
Taxpayers who opt for the special tax regime for workers, professionals, entrepreneurs and investors displaced to Spain under article 93 IRPF must include imputed income derived from urban properties located in Spain and not used in an economic activity, regardless of whether the property constitutes their habitual residence.
9. Practical implications for impatriates
The practical impact of this decision is immediate and significant:
All impatriates who own a main residence in Spain must include imputed real estate income in their annual tax returns while they remain under the special regime.
The imputed income must be calculated in accordance with article 85 IRPF, typically at 2 percent of the cadastral value, or 1.1 percent where the cadastral value has been revised, prorated by days of ownership.
Taxpayers who wish to avoid this imputation must consider whether remaining under the special regime continues to be advantageous, or whether a switch to the general IRPF regime is preferable.
10. Conclusion
The TEAC’s resolution of 17 July 2025 brings much needed clarity to a long standing area of uncertainty in the application of the Spanish impatriates regime. By confirming that the habitual residence is not excluded from imputed income where the tax liability is determined under the IRNR rules, the Tribunal reinforces the principle that the regime must be applied coherently and in its entirety.
For internationally mobile executives, entrepreneurs and investors relocating to Spain, the decision underlines the importance of a careful, forward looking assessment of the full tax implications of opting for the impatriates regime, particularly where residential property is involved.
