It is an opportunity to return assets that have gone to the UK or retired in Portugal.
A new opportunity for Spain to attract professionals and investment. The UK's abandonment of its historic expatriate system, so-called Nom Dom, will leave the country's senior professionals and assets without their assets. Tax umbrella and raises the appeal of the Spanish Beckham Law.
The latest information predicts that the British system, which was introduced in 1799 – more than 200 years ago – will be abolished from April 6, 2025 with limited transitional provisions for existing non-Doms. “This will undoubtedly mean a before and after in the UK and in the city when it comes to attracting talent and significant assets,” explains Mark Cantavilla, co-founder of Relocate & Save and a tax expert on preferential tax regimes. “It could be a great opportunity for smart European countries to fish in this turbulent sea created by the abolition of the NHR in Portugal and the end of the non-dom system,” he adds.
The British system he now wants to get rid of has been successful for decades since it allowed these new residents of the country to pay tax only on income remitted to the UK, leaving out all income from foreign sources (offshore investment portfolios, trusts, staking). Footballers' rights, royalties, etc.).
Thus, in search of a new destination for these taxpayers, the attractiveness of the Spanish system increases. However, tax experts receive more advice from specialists than from large assets. “Today the Becksham Act would not be a great recourse for very large assets that would have to leave the UK,” he explains. Nom Dom has attracted wealthy Russians who moved to the City of London in the 2000s, as well as millionaires from India who have settled in London – such as the wife of the country's current president, Rishi Sunak – and footballers who have chosen to sign for the club. Premier League.
“For them, Becksham's Law doesn't work, because it can't be applied to earners or athletes,” Cantavilla says. In his opinion, preferential systems such as the Italian or Greek flat tax or the individual rate of 100 thousand euros, or countries such as Andorra or Monaco, will seize a large part of these large assets that have no jurisdiction after the abolition of the “non-dom”.
“In any case, if any political party proposes to extend the scope of application of the Beckham regime to also include pensioners, renters, athletes and the self-employed – who were excluded after the 2023 financial year amendment – this could represent a point of ensuring the return of significant assets, which went to the UK via Non Dom “, to retirees who went to Portugal via NHR or even to YouTubers who went to Andorra.” “The return of talent and heritage will be within reach after the recent changes,” he adds.
These are the advantages
As transportation and preservation experts explain, Peckham's law was previously very limited, as it only applied to employed workers with a few exceptions. That is, for employees. However, it was expanded last year with the approval of the Start-up Law. Now, workers in foreign companies, freelancers and businessmen can also benefit from this system.
As long as they prove their tax residency in Spain, Spanish taxpayers will be taxed exclusively on income earned in Spanish territory and not on their global income.
Therefore, income obtained abroad – that which is obtained in a country other than Spain – will not be subject to tax in the Spanish territory, with the exception of employment and professional income, which must always be taxed in the Spanish territory, regardless of the country in which it is made. generated in it. . This is particularly important because taxpayers who are not subject to this regime must pay taxes on their worldwide income. That is, you must declare in Spain the income you receive in Spanish territory as well as the income that comes from anywhere in the world.
Moreover, the tax rates on the income of expatriates covered by the Start-up Law are lower than the maximum marginal personal income tax rates. There are only two sections. Up to 600,000 euros 24%. And from there 47%. This is important because Spain's regular personal income tax rates have a six-bracket scale where the last bracket taxes income exceeding €300,000 at a rate of 47%.
Capital gains (dividends, sale of shares or interest) obtained abroad will be tax-free in Spain. However, those acquired in Spanish territory by a person covered by the special regime must be taxed in Spain. They will do this on a different incremental scale than before, with rates ranging from 21% to 28%, depending on the size of the returns obtained.
Under this system, wealth tax must be paid, although only assets and rights in Spain are counted. To be obligated to pay taxes, assets in Spain must, in general, be greater than one million euros.
Ease of return or arrival of expatriate workers
Ending the tax penalty faced by expatriate employees and managers, as well as remote workers, who arrive or return to Spain to settle in the country in the second half of the year, i.e. between July and December. The Directorate General of Taxation (DGT) has removed the tax hurdle faced by these professionals, who may be required by the IRS to pay taxes as non-residents for their income from work during the months of the year in which they have moved, generating double taxation by having to pay taxes in The same time as residents of the country of origin pay. The DGT consultation, presented this week by EXPANSIÓN, supports the thesis presented by the International Tax Department of Montero Aramburu Abogados, whose specialists raised the issue to the Treasury Management Authority. Specifically, the taxes explain the calculation of the period of fewer than 183 days in a 12-month period required by the rule so that these taxpayers do not have to pay taxes as non-residents in the year of the transfer.
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