Spain's Beckham Law for US Citizens: 24% Flat Tax, Modelo 720 and the IRS (2026)

The Beckham Law is the nickname for the special regime for inbound workers in Article 93 of the Spanish personal income tax law (LIRPF), as rewritten by the Startup Law (Ley 28/2022) with effect from January 1, 2023. It lets you live in Spain as a tax resident but be taxed like a non-resident. Four numbers define it: - 24% flat tax on employment and business income up to 600,000 euros a year. No personal allowance, no deductions, no regional surcharge. The regular Spanish scale runs from 19% to 47% in most regions and to 54% in Valencia. - 47% on employment income above 600,000 euros. - 6 tax years: the year you become Spanish resident plus the next 5. There is no extension. - 0% Spanish tax on income from outside Spain, with one exception: all employment income is taxed in Spain wherever the work is done, once you are in the regime. What Spain taxes under the regime: - Your salary, from a Spanish or foreign employer, at 24%. - Spanish-source dividends, interest and capital gains at the savings scale of 19% to 30%. - Spanish rental income and the imputed income on Spanish property you own, including, on the tax agency's reading, the home you live in. What Spain does not tax while you are in the regime: - US dividends, interest and capital gains. - US rental income. - US pension and IRA distributions. - Foreign business income without a Spanish permanent establishment. That last list is where a US citizen's problem starts. The IRS taxes every line of it. The sections on the saving clause and the credit arithmetic explain why 0% Spanish tax on US income is worth less to an American than to anyone else.

You qualify if you meet all of the following: - You were not a Spanish tax resident in any of the 5 tax years before the year you move. The Startup Law cut this from 10 years. - Your move to Spain is caused by one of the qualifying triggers below. - You do not earn income through a permanent establishment in Spain, other than the entrepreneur and professional routes listed below. Qualifying triggers: - An employment contract with a Spanish employer, or a letter of assignment from a foreign employer posting you to Spain. - Remote work for a foreign employer under an employment contract, where you hold the international teleworking (digital nomad) visa or can show the work is done remotely by means of computer and telecommunication systems. This is the route most US remote employees use. A contractor agreement does not count; it has to be employment. - Appointment as a director of a Spanish company, including one you own, unless the company is a passive holding entity. - An entrepreneurial activity certified as innovative by ENISA. - Highly qualified professional services to Spanish startups, or research and development work, where at least 40% of your income comes from that activity. Your spouse, and children under 25 (any age if disabled), can join the regime with you if they move in the same tax year or the year after, each meets the 5-year test, and their combined taxable income stays below yours. Each files a separate Modelo 149. Who does not qualify: - A self-employed person (autonomo) serving Spanish clients, outside the entrepreneur, professional-services and R&D routes. A US freelancer who registers as autonomo in Spain is normally in the general regime. - Anyone who was Spanish resident in the last 5 years. - Professional athletes, who were carved out in 2015. - A US LLC owner whose LLC has a Spanish permanent establishment because they run it from Spain. This is a common trap: the LLC's income becomes Spanish-source business income, and the permanent establishment can disqualify you. Also check whether the regime is worth it at your income. With no personal allowance and no family deductions, the 24% flat rate only beats the general scale above roughly 40,000 to 55,000 euros of salary, depending on region and dependants. Below that, the general regime plus the treaty can be cheaper even for an American.

The election is made on Modelo 149, filed electronically with the Agencia Tributaria within 6 months of the date you are registered with Spanish Social Security (the alta date) or, if you stay in US Social Security under the totalization agreement, the date on the certificate of coverage. The clock does not start when you land. It starts when the registration is dated, which is often your first day of work. There is no extension. Miss the window and the regime is closed to you until you spend another 5 years outside Spain. Before you can file you need a NIE, a NIF entry in the taxpayer census (Modelo 030) and a digital certificate or Cl@ve PIN. Getting those takes weeks, so start on arrival. Attach the employment contract or assignment letter, the Social Security registration, and evidence of the causal link between the job and the move (a dated offer signed before you arrived). The tax agency answers within about 10 days to 2 months and issues a certificate you give to your employer so payroll withholds at 24%. Every year in the regime you file Modelo 151 instead of the ordinary Modelo 100, during the Renta campaign from early April to June 30. On it you report Spanish-source income only. Because withholding at 24% is the final tax on salary, the return is short. Modelo 149 is also the form for leaving the regime voluntarily (renuncia) or reporting that you have been excluded. Two dates to put in your calendar now: - The Modelo 149 deadline, 6 months from your alta date. - The last day of your sixth tax year. On January 1 of year 7 you are an ordinary Spanish resident with worldwide taxation, worldwide wealth tax and Modelo 720. The section on year 7 covers what to do before then.

Ordinary Spanish residents file Modelo 720 every March declaring foreign bank accounts, foreign securities and foreign real estate, each category separately, whenever a category exceeds 50,000 euros. A related Modelo 721 covers foreign crypto. For a US citizen with a 401(k), a brokerage account and a US home, that is three categories and a return the Court of Justice of the EU had to strike down in 2022 for its penalties. Under the Beckham Law you do not file Modelo 720 or Modelo 721. Your US accounts are invisible to Spain for the 6 years. This is the second most valuable feature of the regime after the rate, and it is the one that quietly disappears in year 7. Wealth tax (Impuesto sobre el Patrimonio): - As a Beckham taxpayer you are liable only on assets located in Spain. Your US brokerage, IRA, 401(k), US home and US LLC are outside the base. - Spanish assets are taxed on the state scale of 0.2% to 3.5% above a 700,000 euro allowance, with an extra 300,000 euro allowance for your main home. Each region sets its own scale and relief. Madrid and Andalusia give a 100% reduction, so residents there pay nothing. Catalonia, Valencia and the Balearics charge the most. - If you buy a 900,000 euro apartment in Barcelona with a 500,000 euro mortgage, your net Spanish assets are 400,000 euros and no wealth tax is due. Buy the same apartment for cash and you are into the Catalan scale. Solidarity tax on large fortunes (Impuesto de Solidaridad de las Grandes Fortunas): - A state-level tax at 1.7% to 3.5% on net wealth above 3 million euros, filed on Modelo 718. It was introduced as temporary for 2022 and 2023 and has been kept in force since. - It exists to override the Madrid and Andalusia wealth tax reliefs. Wealth tax paid elsewhere is credited against it. - Under Beckham it applies to Spanish assets only, so most Americans in the regime are nowhere near it. None of this changes your US reporting. The FBAR (FinCEN 114) is due if your non-US accounts, including a Spanish current account and any Spanish brokerage, total more than 10,000 dollars at any point in the year. Form 8938 is due if your foreign financial assets exceed 200,000 dollars at year end or 300,000 dollars at any time for a single filer living abroad, or 400,000 and 600,000 dollars for a joint filer. Spanish rules relieve you from telling Spain about your US assets. Nothing relieves you from telling the IRS about your Spanish ones.

Article 1(3) of the 1990 US-Spain treaty is the saving clause. It lets the United States tax its citizens and residents as if the treaty did not exist, apart from a short list of exceptions that mainly cover social security, government pensions, students and the relief-from-double-taxation article itself. The Beckham Law is a Spanish domestic measure the treaty never mentions, so the saving clause is not even needed: the IRS simply ignores it. Here is the mechanism that catches Americans: - The Foreign Tax Credit only credits foreign tax actually paid on foreign-source income. Income that Spain exempts carries no Spanish tax, so it produces no credit. - Under Beckham, your US dividends, US interest, US capital gains and US rental income are exempt in Spain. They are also US-source, so for Form 1116 they are not even foreign-source income, and the credit limit for them is zero. - The result is that every dollar of US investment income is taxed by the United States at full rates with nothing to offset it. That is exactly what would happen if you lived in Texas. Beckham has not cost you anything on that income. It has simply given you nothing, while a non-American in the same job pays zero on the same dividends. The same goes the other way. Spanish tax at 24% on your salary is creditable in the general basket only. It cannot offset US tax on passive income. Someone with a 150,000 euro salary and 40,000 dollars of US dividends will have excess general-basket credit they cannot use and a passive-basket bill they cannot cover. What still works: - Article 24 of the treaty (relief from double taxation) is an exception to the saving clause, so the United States must give you a credit for Spanish tax on Spanish-source income. That is your salary, Spanish rent and Spanish gains. - The resourcing rule in Article 24 lets Spanish tax on income the treaty allows Spain to tax be credited even where US domestic sourcing rules would call the income US-source. It matters for stock options and bonuses earned partly before you moved. - The Net Investment Income Tax (3.8% on investment income above 200,000 dollars single or 250,000 dollars joint) cannot be offset by any foreign tax credit, treaty or no treaty, because it is imposed under Chapter 2A rather than Chapter 1. Under Beckham there would be no Spanish tax to credit against it anyway. One more consequence: the Spanish tax agency does not issue a treaty residence certificate to Beckham taxpayers, because Article 93 treats you as a non-resident. That does not matter for the US, which taxes you on citizenship, but it means you cannot use the treaty to reduce withholding in a third country.

Assume a single US citizen, hired by a Madrid employer, 150,000 euro salary, Beckham regime, no other income, exchange rate 1.10 dollars per euro. Spanish side: - Tax: 24% of 150,000 euros = 36,000 euros, withheld through payroll. That is 39,600 dollars. - Employee social security: 6.50% of the maximum contribution base of 61,214 euros = about 3,980 euros. Not creditable, covered in the social security section below. US side: - Wages: 165,000 dollars. - Standard deduction: 16,100 dollars. Taxable income: 148,900 dollars. - US tax at 2026 rates: 10% to 12,400, 12% to 50,400, 22% to 105,700, 24% on the remaining 43,200 dollars. Total: about 28,330 dollars. - Foreign Tax Credit limit: 28,330 dollars, because all the wages are foreign-source. - Spanish tax available: 39,600 dollars. Credit used: 28,330 dollars. US tax due: zero. - Excess credit: about 11,270 dollars, carried back 1 year or forward 10 years in the general basket. The flat 24% is above the US average rate on salaries up to roughly 250,000 dollars for a single filer, so under Beckham the Foreign Tax Credit almost always wipes out US tax on salary and leaves a carryforward. That carryforward is only useful against future general-basket income, for example in year 7 if your Spanish tax rises but your US tax rises faster, which it rarely does. In practice most of it expires. Now add 40,000 dollars of US qualified dividends and long-term gains: - Spanish tax on them: zero, exempt under Beckham. - US tax on them: at the 15% capital gains rate for this income level, about 6,000 dollars, plus no NIIT because total income is below 200,000 dollars. - Credit available in the passive basket: zero. The 11,270 dollar general-basket excess cannot be used. - US tax due: about 6,000 dollars. Married filing jointly with a non-working spouse: the US tax on 165,000 dollars of wages drops to about 17,100 dollars, the credit limit drops with it, and the excess credit rises to about 22,500 dollars. The Beckham regime is generous to the couple in Spain and the United States takes nothing extra. The US bill stays entirely on the investment income. Above 600,000 euros, Spanish tax rises to 47% on the excess and the US marginal rate is 35% or 37%, so the credit covers everything and the excess grows.

The Foreign Earned Income Exclusion (Form 2555) excludes up to 132,900 dollars of foreign earned income in 2026, plus a housing exclusion for rent above the 21,264 dollar base. To use it you need a Spanish tax home and either 330 days abroad in a 12-month period or a full calendar year of bona fide residence in Spain. Rerun the 150,000 euro example with the FEIE: - Wages 165,000 dollars. Excluded 132,900 dollars. Remaining 32,100 dollars, less the 16,100 dollar standard deduction, leaves 16,000 dollars taxable. - The stacking rule taxes that 16,000 dollars at the rates that would apply if the excluded 132,900 dollars were still on the return, which puts it in the 24% bracket. US tax: about 3,840 dollars. - The Spanish tax on the excluded portion is lost. Only the Spanish tax on the non-excluded 32,100 dollars, about 7,700 dollars, is creditable, which more than covers the 3,840 dollars. US tax: zero, with about 3,900 dollars of excess credit instead of 11,270. So both routes give zero US tax on the salary. The FTC banks more excess credit, does not lock you in, and is the better choice for almost every Beckham taxpayer: - Beckham tax at 24% is higher than the US effective rate at every salary below the exclusion, so the FTC covers the US tax without needing the FEIE at all. - The FEIE is an election. Revoking it bars you from re-electing for 5 years without IRS consent. - The FEIE reduces the earned income you can use for IRA contributions. If you exclude all your wages, you cannot contribute to a Roth or traditional IRA that year. Under the FTC you can. - The FEIE reduces the refundable Child Tax Credit. Families with children generally do better on the FTC. - The FEIE does nothing for the US investment income problem described above. Neither does the FTC, but at least the FTC does not add lock-in on top. The one case for the FEIE under Beckham is a salary well below the exclusion combined with a Spanish housing cost that pushes the housing exclusion into play, where the taxpayer wants the simplest possible return. Even then, run the FTC alongside it before filing.

Spain looks at the source of the income. A distribution from a US IRA, 401(k), Roth IRA, or US Social Security is income from outside Spain, and Beckham exempts it. Spain does not tax it, does not want it reported on Modelo 151, and does not include the account in the wealth tax base. The United States taxes it exactly as it would if you lived in Ohio: - Traditional IRA and 401(k) distributions are ordinary income. Roth IRA qualified distributions are tax-free. Early withdrawals before 59 and a half carry the 10% additional tax. - US Social Security is taxed on up to 85% of the benefit under the usual formula. - There is no Spanish tax to credit, so the US tax is the whole bill. For someone retiring to Spain the arithmetic is simple. Under Beckham you pay US tax only, which for a couple with 80,000 dollars of IRA distributions is about 5,000 dollars after the standard deduction. Under the general regime, Spain would tax the same distributions at the progressive scale, roughly 20,000 euros, and Article 20 of the treaty plus Form 1116 would leave you paying the higher Spanish amount. Beckham is worth about 15,000 euros a year to that couple. The problem is that a retiree with no employment trigger cannot get into the regime, so this only helps the executive who keeps drawing on a 401(k) while working in Spain. Two planning points: - Roth conversions during the 6 Beckham years are taxed by the United States and ignored by Spain. In year 7, Spain would tax a conversion as income at up to 47%. If you were planning conversions anyway, do them before year 7. - Contributions to US plans while in Spain: a US employer's 401(k) match on a secondment is fine. If your employer is Spanish, you have no 401(k). IRA contributions require US taxable earned income, which you have under the FTC route but not under the FEIE, another reason to prefer the FTC. Spanish pension plans (planes de pensiones) are the mirror image. Contributions are capped at 1,500 euros a year in Spain and get no US deduction, growth is arguably reportable to the IRS, and the plan may be a PFIC. Most Americans in Spain skip them.

The US-Spain income tax treaty was signed on February 22, 1990 and took effect in 1991. A protocol signed on January 14, 2013 sat in the US Senate for six years and entered into force on November 27, 2019, with effect for withholding from that date and for other taxes from January 1, 2020. For a Beckham taxpayer the treaty matters less than you might hope, for two reasons: - The saving clause in Article 1(3) lets the United States tax you in full regardless of the treaty. - Spain treats you as a non-resident under Article 93, will not issue a residence certificate, and so you generally cannot claim treaty benefits as a Spanish resident against third countries. The provisions that still work for you: - Article 24, relief from double taxation, is an exception to the saving clause. It obliges the United States to credit Spanish tax on Spanish-source income and contains the resourcing rule. - Article 20 on pensions and Article 21 on government service are exceptions too, but under Beckham Spain is not taxing your US pension anyway. - Article 26, the mutual agreement procedure, lets you ask both competent authorities to resolve a double-tax dispute, for example over the source of a bonus earned across the move. - The 2019 protocol cut withholding on US-source dividends paid to Spanish residents and exempted most interest and royalties, but as a US citizen you are not subject to US non-resident withholding, so those changes affect Spanish colleagues, not you. The totalization agreement between the United States and Spain has been in force since April 1, 1988. It decides which country's social security system covers you: - Hired locally by a Spanish employer, or working remotely from Spain for a US employer that has no presence there: you are in Spanish Social Security. No FICA, no Schedule SE. - Sent by a US employer to Spain for 5 years or less: you can stay in US Social Security with a certificate of coverage from the SSA and be exempt from Spanish contributions. Your employer files the request. - Self-employed and resident in Spain: covered by Spain, and exempt from US self-employment tax if you attach a Spanish certificate of coverage. Self-employment usually also takes you out of Beckham, so this rarely applies to regime taxpayers. - Contribution periods in both countries can be combined to qualify for a benefit in either. The Spanish minimum for a retirement pension is 15 years; the US minimum is 40 quarters. Since the Social Security Fairness Act of January 2025 a Spanish pension no longer reduces your US benefit under the Windfall Elimination Provision.

As an employee in Spain you pay a total of 6.50% of your contribution base in 2026: 4.70% for common contingencies, 1.55% for unemployment, 0.10% for vocational training, and 0.15% for the intergenerational equity mechanism (MEI), which rose from 0.13% in 2025 and climbs 0.10 points a year until 2029. Your employer pays about 30% on top. The contribution base is capped at 5,101.20 euros a month, or 61,214.40 euros a year, in 2026. So the most an employee pays is about 3,980 euros a year, however high the salary. Since 2025 there is also a solidarity contribution on salary above the cap, at 1.15% to 1.46% depending on how far above the cap you are, of which the employee share is about one sixth. Three things about these contributions for your US return: - They are not creditable on Form 1116. Social security contributions covered by the totalization agreement are excluded from the definition of a creditable foreign income tax. Do not add them to the 36,000 euros in the worked example. - They are not deductible on Schedule A either. Foreign social security taxes are not deductible as foreign income taxes, and the payroll withholding is not a state or local tax. - Under the FEIE they are irrelevant, because the exclusion works on gross wages. Under Beckham the contributions do not reduce your Spanish taxable base either. The 24% applies to gross employment income with no deduction for social security, unlike the general regime, which deducts contributions before applying the scale. On a 150,000 euro salary that difference is about 950 euros of extra Spanish tax compared with a regime that allowed the deduction, small next to the rate saving. Health cover comes with the contributions. Once registered, you and your dependants use the public system. That is worth keeping in mind if you are comparing an employment contract with Beckham against a contractor arrangement without it.

You lose the Beckham regime, and go back to the general regime from the start of the tax year in which the breach happens, if any of these occur: - You start a self-employed activity with a Spanish permanent establishment, outside the entrepreneur, professional-services or R&D routes. Registering as autonomo to take on Spanish clients on the side is the most common way Americans fall out of the regime. - The link between the job and the move breaks and you cannot show a new qualifying trigger. Losing your job does not by itself end the regime, but a long gap followed by a non-qualifying activity can. - You become a director of a passive holding company, or your shareholding in a company you direct takes it outside the rules. - Your spouse's or children's income exceeds yours, which ends the regime for them, not for you. - You leave Spain and stop being tax resident. The regime simply ends. If you come back within 5 years you cannot re-elect. Exclusion is reported on Modelo 149 within a month of the breach. You then file Modelo 100 for the whole year on worldwide income, Modelo 720 for the following March, and wealth tax on worldwide assets. The 600,000 euro limit does not end the regime. Income above it is taxed at 47% and everything below stays at 24%. Voluntary renunciation is also on Modelo 149, filed in November or December to take effect from the next year. Consider it if your circumstances change so that the general regime plus treaty credits would tax you less, for example if you stop earning salary and live mainly on US investment income that the general regime would tax at the 19% to 30% savings scale with a US credit, versus zero Spanish tax and full US tax under Beckham. The numbers are close in that scenario and the Modelo 720 burden usually tips it toward staying in.

On January 1 of your seventh tax year you become an ordinary Spanish resident. Nothing phases in. Everything switches at once: - Worldwide income. US dividends, interest and capital gains enter the Spanish savings base at 19% on the first 6,000 euros, 21% to 50,000 euros, 23% to 200,000 euros, 27% to 300,000 euros and 30% above that. US rental income and US pension distributions enter the general base at the progressive scale up to 47%, or higher in some regions. - Modelo 720 and Modelo 721 for every category of foreign assets above 50,000 euros, due by March 31 of year 8 for the position at December 31 of year 7. Foreign accounts, foreign securities, foreign real estate and foreign crypto each count separately. Your 401(k) and IRA are reportable in the securities category on the prevailing reading. - Wealth tax on worldwide net assets, filed on Modelo 714 by June 30, above the 700,000 euro allowance and 300,000 euro home allowance, at regional rates. Madrid and Andalusia relieve it entirely, Catalonia and Valencia do not. The solidarity tax on large fortunes catches worldwide net wealth above 3 million euros everywhere. - Personal and family allowances come back, and the mortgage and dependant deductions with them. This is the one change in your favour. For a US citizen the good news is that the United States now has Spanish tax to credit. US dividends taxed at 21% or 23% in Spain and 15% in the United States produce excess passive credit, so the US bill on investment income goes to zero and the Spanish bill is the whole cost. The double reporting (FBAR and Form 8938 to the United States, Modelo 720 and 714 to Spain) is the real burden, and it is permanent. What to do in years 5 and 6, while still inside the regime: - Realise US capital gains before year 7. Spain does not tax them under Beckham; in year 7 it taxes them at up to 30% with only a 15% or 20% US credit to set against the Spanish bill. - Do Roth conversions before year 7 for the same reason. - Rebalance out of US mutual funds and ETFs that Spain will treat unfavourably, and out of Spanish or European funds the IRS treats as PFICs, so that year 7 starts with a portfolio both countries tax sensibly. - Decide where to live. A move from Barcelona to Madrid before January 1 of year 7 removes the wealth tax entirely. - Consider leaving Spain. The regime ending is the point at which many executives are transferred elsewhere, and the year of departure is a split year for Spain only if you spend fewer than 183 days there. If your US employer can time a transfer, ending the assignment before the seventh year means you never file a worldwide Spanish return at all.