Explanation about Digital Nomad Visa and Beckham Law in Spain: Key Differences.
Among the most attractive options for those looking to relocate are the Digital Nomad Visa (DNV) and the Spanish Special Expats’ Tax Regime (Régimen especial aplicable a los trabajadores desplazados a territorio español), commonly known as the Beckham Law (BL). However, there is often confusion between these two regimes. It is essential to understand that while the DNV focuses on residency, the BL targets tax benefits that can be based on DNV or in another kind of Visa, as for example “autorización de residencia y trabajo por cuenta ajena”(Authorization of residence and work for others.)
The Digital Nomad Visa (DNV)
Regulated by Law 14/2013, of 27 September, the Digital Nomad Visa is designed to attract professionals who work remotely for foreign companies or as freelancers. This visa allows individuals to legally reside in Spain for an initial period of one or three years (depending on the application process), with the possibility of renewal for up to five years.
A common question among applicants is whether they must stay in Spain for at least six months to retain this visa. While there is no explicit obligation to remain for six months, the visa holder must demonstrate that Spain is their primary base of activities. As a precaution, it is advisable that individuals benefiting from the DNV do not spend more than six months outside of Spain. However, absences within the European Union do not count towards this period—only travels outside the EU are considered.
Income Requirements
To obtain a Spain Digital Nomad Visa, the applicant must confirm remote working income of at least €2,762 per month, or €33,144 per year.
The income threshold for a digital nomad depends on the Spanish minimum wage (SMI). For families, the monthly income requirements are higher:
- €1,035 must be added for a spouse or an adult relative
- €346 per child
Visa and Residency Expenses
The applicant must pay government fees, purchase or rent property in Spain, and obtain health insurance. Spanish medical insurance is only necessary for those working remotely for a foreign company. Freelancers do not need this insurance.
The Beckham Law (BL)
Regulated by Article 93 of Law 35/2006, of 28 November, on Personal Income Tax (IRPF), the Beckham Law provides tax benefits to expatriates who move their tax residence to Spain under specific conditions. The key advantage is that beneficiaries are taxed as non-residents for up to six years, enjoying a fixed tax rate:
- 24% on income up to €600,000
- 47% on any income exceeding €600,000
To be eligible, applicants must meet the following conditions:
- They must not have been tax residents in Spain for the five tax years preceding their relocation.
- Their move to Spain must be due to one of the following conditions:
- The start of a standard or special employment relationship with an employer in Spain.
- A transfer ordered by a foreign employer to provide services to a company or entity resident in Spain.
- Relocation due to assuming the role of administrator in an entity.
Additionally, the special tax regime can be extended to the applicant’s spouse and children under 25 (or of any age if they have a disability), provided they meet specific residency and dependency requirements.
What Happens with Social Security/Health Insurance/ Social Security expenses?
For the Digital Nomad Visa, the applicant must either register with the Spanish social security system or obtain private health insurance.
For the Beckham Law, the applicant must submit, along with Form 149, either proof of registration in the Spanish social security system or a document confirming the maintenance of their original social security coverage.
The Importance of Coordinating Both Regimes
To maximize benefits and avoid legal issues, it is crucial to handle the application processes for both regimes in a coordinated manner. Without proper planning, an individual may qualify for one regime but be disqualified from the other. For instance, obtaining a Digital Nomad Visa without considering the Beckham Law’s requirements could result in the loss of tax benefits.
By managing both processes together, applicants can ensure that all documents and requirements are fulfilled efficiently, avoiding duplication or errors. Each case is unique, and a well-structured plan can help maximize advantages in terms of both residency and taxation.
Conclusion: Choosing the Right Path for Your Move to Spain
Understanding the distinction between the Digital Nomad Visa and the Beckham Law is essential for any international professional considering relocation to Spain. While the DNV regulates your legal stay, the Beckham Law offers significant tax advantages. Coordinating both processes strategically can lead to substantial financial savings and a smooth transition.
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- #BeckhamLaw
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- #ExpatTaxation
- #RemoteWorkSpain
- #InternationalProfessionals
Thank you for reading this post, if you think we have been able to help you or if you still have any questions, you can always contact me via WhattsApp (+49 1520 8381499) or e-mail (erica@taxandlawspain.com).
