A Game-Changer for International Talent
In a significant legal development that may reshape how global professionals structure their assignments in Spain, the Central Economic-Administrative Court (TEAC) issued a groundbreaking resolution on November 19, 2024. This ruling broadens the scope of the Special Expatriate Tax Regime—more widely known as the Beckham Law—by affirming that expatriates who also serve as company directors can still qualify for the regime, as long as a genuine employment relationship exists.
Understanding the Background: What Is the Beckham Law?
The Beckham Law (Article 93 of the Spanish Personal Income Tax Act – LIRPF) was introduced to attract foreign talent by offering a preferential tax treatment: a flat 24% tax rate on Spanish-source income up to €600,000 during a six-year period, with income exceeding that taxed at 47%.
Until now, the Spanish Tax Authorities had applied a restrictive interpretation of this law, excluding individuals who held both an employment contract and a board position (i.e., a directorship), citing the so-called “theory of the link” (teoría del vínculo). According to this doctrine, a director cannot simultaneously be considered an employee for tax purposes—effectively blocking many professionals from accessing the Beckham Law.
What Did the TEAC Decide?
In its resolution (Ref. 00/00636/2022), the TEAC clearly rejected the indiscriminate application of the “theory of the link”. Relying on case law from both the Court of Justice of the European Union (CJEU) and the Spanish Supreme Court, the Court established the following key principles:
- Being a director does not automatically disqualify an individual from the Beckham Law.
- A factual, legitimate employment relationship must be assessed independently of board appointments.
- Substance over form: contractual duties, reporting lines, and remuneration matter more than job titles.
This is a game-changing decision that prioritizes reality over legal formalities and aligns Spanish tax law with European jurisprudence.
This resolution offers new planning opportunities and tax certainty for:
➤ International Executives
Multinational companies relocating directors or C-suite executives to Spain can now revisit previous eligibility assessments and possibly benefit from the Beckham Law.
➤ Entrepreneurs & Start-Up Founders
Professionals relocating to Spain to lead start-ups—where directorship is often unavoidable—may now also qualify for tax benefits under the revised interpretation.
➤ Private Wealth & Family Offices
Expatriates involved in the management of private investment vehicles or family-owned businesses can enjoy the regime, provided that a legitimate employment framework is in place.
What’s Next?
At Lullius Partners, we are already advising clients who may now benefit from this legal shift. As a top-tier boutique law firm specialized in Private Wealth and Tax Law in Spain, we offer:
- Case-by-case eligibility assessments for the Beckham Law
- Strategic structuring of employment and governance relationships
- Legal opinions and tax representation before the Spanish Tax Agency
- Cross-border coordination with advisors in the UK, Switzerland, Germany, and the US
This resolution marks a turning point in Spanish expatriate taxation. It underscores the importance of individualized legal analysis, especially for high-level professionals and private wealth structures. Spain is reaffirming its position as a competitive jurisdiction for international talent—and Lullius Partners is here to help you make the most of it.
