admin

As you may have seen in our media, we have discussed the Beckham Law, its requirements, advantages, and how it works. But it is also important to understand what Spanish tax inspectors are looking for when they open an investigation. The Tax Agency does not act randomly, so receiving a notification usually has a reason.

Inspectors tend to look for certain patterns: newly established Spanish companies with limited resources that generate income abroad, foreign companies managed from Spain that could be considered permanent establishments, assets abroad that are disproportionate to declared salaries, and income or assets abroad in the year of relocation, such as property sales, transfers, or investment returns.

Being aware of these factors helps you anticipate possible inspections and ensure that your structure under the Beckham Law complies with regulations. If you would like to review your situation, please do not hesitate to contact us.

The Beckham Law regime has historically been very attractive for professionals relocating to Spain, as it allows them to pay a fixed tax rate on income earned in the country, generally without taxing worldwide income. However, questions have always arisen regarding the application of certain rules, particularly concerning real estate.

Until now, if a property in Spain was the taxpayer’s primary residence, it was not considered to generate income from real estate, following the same logic applied to regular residents. However, a recent ruling has changed this interpretation, and now taxpayers under the Beckham Law must pay tax on the property they own in Spain, even if it is their main residence. In practice, this means they are treated as residents with an available urban property, with the corresponding tax obligations.

This change highlights that special regimes remain highly attractive, but they are subject to modifications in interpretative criteria and a higher level of tax scrutiny. For this reason, personalized tax advice is essential for beneficiaries of this regime, helping them plan ahead and optimize their tax situation while avoiding unexpected surprises. Staying informed and adapting to changes is key to fully benefiting from these special regimes.

There is a common belief that if you live between two countries or earn income abroad, you will end up paying taxes twice on the same income. In reality, the tax situation is very different.

Most countries have signed double taxation agreements (DTAs) specifically designed to prevent the same income from being taxed twice. These agreements determine which country has the right to tax each type of income—such as employment income, dividends, rental income, or pensions—and how double taxation is eliminated.

In practice, your country of tax residence will usually allow you to credit or deduct the tax paid in the other country, in accordance with the applicable tax treaty. As a result, even if you have tax obligations in more than one jurisdiction, the overall tax burden is generally neutralized.

Living between countries can certainly add complexity. Correctly determining tax residence, applying the right treaty, and filing tax returns properly and on time are essential. When done correctly, double taxation is the exception, not the rule.

In short, having international income does not automatically mean paying more tax—it means understanding the rules and applying tax treaties correctly.

It is commonly assumed that non-residents cannot apply the reinvestment exemption for a primary residence. However, this is not always correct.

Additional Provision 7 of the Spanish Personal Income Tax Law allows the capital gain from the sale of a former primary residence in Spain to be exempt, even after the taxpayer has become a non-resident, provided the proceeds are reinvested in a new primary residence.

To apply the exemption:

• The taxpayer must have been a Spanish tax resident prior to the sale.

• Both properties must qualify as primary residences under IRPF rules.

• Legal reinvestment deadlines must be met.

• The new primary residence does not need to be located in Spain, as confirmed by recent binding rulings.

This exemption does not apply to taxpayers under the Beckham Law regime.

Due to its complexity, this provision should be analysed carefully on a case-by-case basis.