Are you sure you are interested in being an expatriate?
When a non-resident moves his or her residence to Spain, he or she can benefit from the tax regime for impatriates.
However, it is important to analyse each individual case; in some cases this regime may not be as beneficial as it seems…
Impatriate regime or colloquially known as the " Beckham law".
Relocation to Spain
When an individual who has not resided in Spain in the last five years moves to Spain to work or carry out an activity, he or she can take advantage of the so-called impatriate regime.
In this way, although they become a Spanish resident, during the year of their move and the following five years they can be taxed according to the rules of Non-Resident Income Tax (IRNR) instead of Personal Income Tax (IRPF).
Tax savings
This can lead to significant savings for the person concerned if their remuneration is high (e.g. if they are a manager), as the following personal income tax rates apply (lower than the general rates):
- The first 600,000 euros of income obtained attributable to the general base is taxed at 24%, and the rest at 47%.
- With regard to income from the savings base, the rates are the same as for personal income tax (between 19 and 28%).
Caution
However, as the IRNR rules apply, IRNR taxpayers cannot benefit from certain tax advantages applicable to IRPF taxpayers.
Please bear this in mind when exercising the option.
Check if it is suitable for you to become an impatriate
Motherhood
Firstly, in this scheme, the paternity and maternity benefits received are not exempt.
For example, if a taxpayer receives 11,500 euros in maternity benefit, it will have an additional tax cost of 2,760 euros (24%).
Severance pay
On the other hand, if a worker under the inpatriate regime receives severance pay, in his personal income tax return he must include it in its entirety, without any exemption or reduction (even if the compensation is within the limits provided for in the Workers’ Statute).
This will entail a minimum tax cost of 24% of the compensation received.
Bonus
Finally, the bonuses received by these workers are also not entitled to the 30% reduction applicable in the case of extraordinary remuneration generated in more than two years.
Therefore, depending on the amount of the total remuneration and the bonus, the inpatriate regime may be more burdensome.
See what will be the taxation of a worker with an annual salary of 40,000 euros who receives a bonus of 30,000 euros with the right to a reduction:
| Concept | Impatriates | Personal income tax |
| Rend. Gross Labor | 70.000 | 70.000 |
| 30% Reduction | – | -9.000 (1) |
| Rend. Net Work | 70.000 | 61.000 |
| Fee to be paid | 16.800 (2) | 15.993 (3) |
30,000 euros bonus × 30%.
70,000 × 24%.
Personal income tax quota for a worker with two children who files an individual return. It is considered that no other income is obtained.
Other incentives
In the impatriate regime, the deduction for large families or for having dependents with disabilities is also not applicable.
On the other hand, inpatriates do enjoy exemption on income from work in kind (health insurance, restaurant voucher, transport voucher, etc.), under the same conditions as workers who pay personal income tax.
En resumen
Aunque en el régimen de impatriados los tipos de gravamen son más bajos, no son aplicables diversos incentivos que existen en el IRPF.
Por tanto, antes de optar por dicho régimen es importante asegurarse de que se va a tributar menos que en el IRPF.
