How the Beckham Law works for US citizens in Spain

The Beckham Law is the special tax regime in Article 93 of the Spanish income tax law. If you qualify, you become a Spanish tax resident but pay tax broadly like a non-resident:

• Employment income: 24% up to €600,000 a year, 47% above that.
• Scope: only Spanish-source income is taxed. Foreign dividends, interest and gains, including from US brokerage accounts, stay outside Spanish income tax.
• Duration: the year you become resident plus the following five tax years, so six tax returns in total.
• Family: your spouse and children under 25 can also opt in if they move with you in your first year, provided their combined tax base stays below yours.

All of this is set out in the AEAT’s guide to the regime.

On the US side, nothing changes: the IRS taxes citizens on worldwide income wherever they live. You keep filing Form 1040 every year, and you use either the Foreign Tax Credit or the Foreign Earned Income Exclusion to avoid paying tax twice on the same salary. The rest of this article is about how those two systems fit together.

Who qualifies: the conditions

The Spanish rules work the same way for Americans as for any other nationality. Since the 2023 Startups Law (Ley 28/2022), you need to meet all three of these conditions:

• Five years outside Spanish tax residency before the move. This was ten years before 2023.
• A qualifying reason for the move. One of the following:
  • An employment contract with a Spanish employer, or a secondment from your US employer.
  • Remote work for a foreign employer, carried out entirely through computers and telecoms. This is the route most American remote workers use, often alongside the digital nomad visa.
  • Becoming a director of a company. If the company is a passive holding company, your stake must be under 25%.
  • An innovative entrepreneurial activity, which needs a favourable report from ENISA.
  • Working as a highly qualified professional for a Spanish startup, or in research, development or training, where this work makes up more than 40% of your business and professional income.
• Income outside a Spanish permanent establishment. Ordinary freelancing for several clients through autónomo registration falls outside the regime.

The AEAT summarises these routes in its regime guide. If you’re moving with a US company and plan to work remotely, our article on the Beckham Law for remote workers covers that route in more detail.

How to apply

You apply by filing Modelo 149 with the Spanish Tax Agency (AEAT). The deadline is six months from the start of your work in Spain, which is normally the date you are registered with Spanish Social Security. If you stay in US Social Security under a certificate of coverage, the six months run from the date on that document.

The six-month window is strict. A late application is final: you then pay tax under the standard progressive rates for the whole period. Once approved, you file your annual Spanish return on Modelo 151 instead of the standard Modelo 100.

The US side: FTC or FEIE

Americans in Spain avoid double taxation on salary with one of two tools.

The Foreign Tax Credit (FTC) gives you a dollar-for-dollar credit against your US tax for income tax paid to Spain (IRS). The result is that you broadly pay the higher of your Spanish bill and your US bill on the same income. Unused credits can be carried back one year and forward ten years.

The Foreign Earned Income Exclusion (FEIE) removes up to $132,900 of foreign salary from US tax for 2026, up from $130,000 for 2025 (IRS). To claim it, you need to pass one of two tests (IRS):

• The bona fide residence test: you’re a genuine resident of a foreign country for an uninterrupted period that includes a full tax year.
• The physical presence test: you’re physically in a foreign country for at least 330 full days in any 12-month period. This test counts days only, whatever your tax status there.

Why many preparers avoid the FEIE for Beckham holders

The bona fide residence test is where the Beckham Law causes doubt. Under IRS rules, if you tell a foreign country’s authorities that you’re not a resident and they tax you on that basis, you can’t be a bona fide resident there.

Beckham holders are Spanish tax residents, but they pay tax under non-resident rules, so some preparers treat the bona fide test as unsafe. The physical presence test avoids the question entirely, since it only counts days.

Even when you can claim it, the FEIE is rarely the better tool for a Beckham holder:

• Spanish tax on excluded income earns no credit, so the 24% you pay on the first $132,900 gives you nothing to carry forward.
• Income above the exclusion is taxed at the higher US brackets you would have reached anyway, under the IRS “stacking” rule.
• Spain’s 24% already exceeds the average US federal rate on most salaries below about $340,000, so the FTC on its own usually brings US tax on salary to zero.

For most Beckham holders, the FTC is the cleaner route. It also builds a bank of excess credits that can absorb US tax in later years, for example if your income rises.

Worked comparison: three salaries

This table compares the total income tax a single US citizen pays on salary under the Beckham Law and under standard Spanish residency, after the US Foreign Tax Credit.

Assumptions: tax year 2026, single filer, salary only, living in Madrid, employed and paying Spanish Social Security, €1 = $1.15, US federal tax only (no state tax), standard deduction of $16,100 (IRS). Standard residency uses the state scale and Madrid’s regional scale, after employee Social Security and the €2,000 employment expense allowance.

How the $250,000 example is calculated

Beckham Law, Spain: €217,391 × 24% = €52,174, or $60,000.

Standard residency, Spain: salary of €217,391, less €4,346 of employee Social Security and the €2,000 allowance, leaves a taxable base of €211,045. The state scale gives €42,409 and Madrid’s regional scale gives €38,658, after the personal allowances. Total: €81,067 (37.3% of salary), or $93,227.

US federal tax: $250,000 less the $16,100 standard deduction leaves $233,900. Applying the 2026 brackets gives $51,304, an average rate of 20.5%.

Credit: Spanish tax under either option exceeds $51,304, so the credit wipes out the US bill in both cases. Under the Beckham Law you carry forward $8,696 of unused credit. Under standard residency the unused credit is $41,923, but it rarely gets used, since your Spanish tax keeps exceeding your US tax each year.

What the numbers show

Up to about $340,000 of salary, the 24% Spanish rate is higher than your average US federal rate. The FTC covers the full US bill, and you pay 24% in total.

Above that, US rates of 32% to 37% start to push your average US rate past 24%, and you pay the difference to the IRS. At $500,000 that top-up is about $18,100. Your total, $138,100, is exactly what you’d pay on that salary living in the US with no state tax.

Standard residency costs more at every level, because Spanish progressive rates reach 45% in Madrid and higher in regions such as Catalonia and Valencia.

The real gap varies with your region, your filing status, any US state tax you still owe, and income besides salary. Treat these figures as a starting point, and run your own numbers before you apply.

What changes and what stays the same

The Beckham Law changes your Spanish position. Your US obligations stay exactly as they were.

The Modelo 720 exemption saves you a detailed annual return listing foreign accounts, investments and property worth more than €50,000 in each category. Under the regime, wealth tax only applies to assets located in Spain, so your US retirement accounts and brokerage holdings stay outside it.

Your US reporting stays the same under both exemptions. The FBAR applies when the combined value of your foreign financial accounts exceeds $10,000 at any point in the year (FinCEN). For Americans living abroad, Form 8938 applies above $200,000 at year end or $300,000 at any time if you’re single, and $400,000 or $600,000 if you’re married filing jointly (IRS). Your Spanish bank accounts count towards both.

The US-Spain treaty and Social Security

The tax treaty. The US-Spain income tax treaty includes a “saving clause” that lets the US tax its citizens as if the treaty didn’t exist, with a few exceptions. For a US citizen, the treaty therefore rarely lowers US tax on salary; the FTC does that work.

On the Spanish side, Beckham holders can ask the AEAT for a certificate of tax residence, but because they’re taxed only on Spanish-source income, they may be refused treaty benefits that depend on being resident. In practice this mostly affects withholding on US-source dividends and interest. Ask your adviser how this applies to your investment income before you move it.

Social Security. The US-Spain Totalization Agreement stops you paying into both systems on the same work. If your US employer sends you to Spain for up to five years, you can usually stay in US Social Security with a certificate of coverage. If you’re hired locally or work in Spain long term, you pay into Spanish Social Security instead. Either way, Spanish contributions earn no credit against US income tax.

Your main home: deemed income and the 2025 and 2026 rulings

Spain charges a deemed rental income on property you own but don’t rent out. For standard residents, the main home is exempt. The question for Beckham holders is whether they get the same exemption.

How the charge works. The deemed income is 2% of the property’s cadastral value, or 1.1% if that value was revised in the last ten years (Article 85 of the income tax law). That income is then taxed at your Beckham rate of 24%. For a home with a cadastral value of €300,000 at 1.1%, the deemed income is €3,300 and the tax is €792 a year. Cadastral values are usually well below market prices.

The rulings, in order

• TEAC resolution 3697/2025, 17 July 2025: the central economic-administrative tribunal ruled that Beckham holders must declare deemed income on their main home. This binds the Tax Agency (summary).
• TSJ Madrid judgment 665/2025, 17 September 2025: the Madrid High Court ruled the main home stays exempt, as for any resident (summary). It also allowed the taxpayer to correct past returns and recover the tax paid, with interest (Andersen).
• DGT binding consultation V2467-25, 11 December 2025: the Directorate General for Taxes confirmed that a Beckham holder can claim the main home exemption on the gain when selling their home (Andersen).
• European Commission reasoned opinion, 29 April 2026: the Commission told Spain that taxing the main home of Beckham holders, while exempting other residents, breaches the free movement of capital under Article 63 of the EU Treaty. Spain had two months to respond before a possible referral to the EU Court of Justice (Andersen).

What filers are doing now

The Tax Agency still applies the TEAC position, so most advisers recommend declaring the deemed income and then claiming a refund, citing the TSJ Madrid judgment and the EU opinion. That route avoids penalties while keeping your claim open. The amount at stake is small for most homes, so the main reason to act is to protect your refund rights for each year. If you’re still buying, our page on resident mortgages in Spain covers financing as a Beckham holder.

US LLCs: how Spain looks at them

The IRS treats a single-member LLC as a disregarded entity by default, so its income flows onto your own return. Spain decides the treatment of each foreign entity under its own rules, case by case.

Spain’s DGT has generally treated a US LLC that is disregarded for US federal tax as a pass-through entity, with income attributed directly to its members. Binding consultation V3311-13 of 11 November 2013 applied this under the US-Spain treaty. For Beckham holders specifically, V1372-25 of 21 July 2025 let a taxpayer keep the regime while receiving income from a UK LLP, because the partnership was transparent and had no permanent establishment in Spain. Our Beckham Law for UK citizens guide covers that ruling in more detail.

Two risks remain:

• Permanent establishment. If you run the LLC’s business from Spain, Spain can treat that activity as Spanish-source business income. That can take you outside the regime altogether, since condition 3 rules out income through a Spanish permanent establishment.
• Classification. An LLC that has elected to be taxed as a corporation in the US, or that has several members, may be classified differently.

Get both sides reviewed before you move. If your LLC is really a vehicle for freelancing, our article on common Beckham Law mistakes covers why that usually rules the regime out.

Your employer’s permanent establishment risk

Your work in Spain can create a tax problem for your US employer as well as for you. If you regularly sign contracts on the company’s behalf, or negotiate deals it then signs without changes, Spain can treat you as a permanent establishment of that company. The company would then owe Spanish corporate tax on profits linked to your work.

This is one of the most common reasons an HR or legal team blocks a Beckham Law move. Raise it with your employer in writing before you apply. A remote role that excludes sales and contract authority usually keeps the risk low.

Is the Beckham Law right for you?

The regime usually suits you if:

• You have spent the last five years outside Spanish tax residency.
• You’re moving for a job, a secondment, a remote role, a directorship or an ENISA-approved business.
• Your salary is above about $75,000 (around €65,000), where the average standard Spanish rate starts to pass 24%.
• You hold significant US investments, since foreign dividends and gains stay outside Spanish tax and outside wealth tax.
• You can file Modelo 149 within six months of starting work.

Look closely before applying if:

• You’ll work as a freelancer for several clients, since that income falls outside the regime.
• Your salary is above about $340,000, as you’ll owe a US top-up. The regime still usually saves money; confirm it with your own numbers.
• You plan to stay longer than six years, as standard rates apply after that. Consider the timing of any sale or large bonus.
• You own a US LLC that trades actively, or your employer is sensitive to permanent establishment risk.
• Your main income will be from Spanish rental property or Spanish investments, which the regime taxes at its own rates without the usual resident allowances.

Our comparison of the Beckham Law vs standard Spanish tax residency works through the Spanish side in more detail.

Common mistakes Americans make

• Assuming the FEIE is the default. For most Beckham holders, the Foreign Tax Credit gives a better result and avoids the bona fide residence question.
• Checking only the Spanish rate. At salaries above about $340,000, you’ll still owe the IRS a top-up. Include it in your comparison.
• Applying before raising permanent establishment risk with your employer. This can become their objection later, after you’ve moved.
• Treating a US LLC as invisible in Spain. Spain looks at what the LLC does from Spain, whatever its US status.
• Missing the six-month deadline. It runs from your Social Security registration date and the deadline is fixed.
• Dropping FBAR or Form 8938. Spanish exemptions leave US reporting unchanged, and Spanish accounts count towards both thresholds.

Ready to check your numbers?

The Beckham Law usually saves US citizens money, and the size of the saving depends on your salary, your region and your investments. We’ll run your figures through both the Spanish and US calculations and help you file Modelo 149 on time.

Want to see the numbers for your salary?

This article is for informational purposes only and does not constitute tax or financial advice. Spanish and US tax rules change regularly, and individual circumstances vary significantly. Always consult a qualified adviser in both jurisdictions for advice specific to your situation.