Archive: Startups Law and Beckham changes announced in 2022

On December 1, the Law for the Promotion of the Ecosystem of emerging companies, known as the “Startups” Law, was approved in Congress.

A “long-awaited” Law, since it introduces relevant changes to the Special Tax Regime (the Beckham Law), as well as other relevant news in respect of tax incentives and new labor an immigration measures.

The new Law will entry into force, the day after its publication in the Official State Gazelle (BOE). However, with respect to the changes in the Personal Income Tax, it is specific established that they will enter into force in January 1^st 2023.

 

What are the main changes in the Beckham Law?

 

1. The non tax residence period will be 5 years, instead of 10 years as are required in the current legislation.
2. In addition, it is expressly established that the posting to Spain may occur either in the year when the Special Regime will apply or in the previous year.
3. The reason for coming to Spain must be one of the following (new scenarios are introduced):

a) Labor relationship with (i) a Spanish Company (ii) an international assignment from a Foreign Company to a Spanish one or (iii) because of the decision of working on remote in Spain for a foreign employer (digital nomads)

b) Acquisition of administrator status of a Company (no matter if the individual is the owner, except in the case of entities with the sole purpose of managing moveable or real estate assets –“entidades patrimoniales)

c) Carry out an independent activity qualified as “entrepreneur activity”

d) Carry out an independent activity by a high qualified professional who renders services to emerging companies, or who is carrying out training activities, research, development and innovation, and more than 40% of his/her revenues derive from these activities.

4. The individual cannot obtain income considered as income derived from a Permanent Establishment in Spain (with the exception of the two last scenarios )

5. Provided that certain requirements are met, the spouse and dependent under 25 years old, can also opt for the application of the Special Tax Regime.

What additional changes in respect of Personal Income Tax?

1. Benefit in kind in form of shares will be exempt from tax up to 50.000 euros (provided that the company is considered as an emerging entity). In the case of Stock Options, the qualification as emerging entity must be met at the moment of grant.
2. Exemption for certain Benefit in kind for non tax resident individual or individuals under the Beckham Law.
3. Carried Interests. Qualified as employment income, with a reduction of 50%, provided that certain requirements are met.
4. Deduction for investment in New or recently Created companies. The current deduction is incremented up to 50% (currently 30%), with an increase in the base for deduction up to 100.000 euros (currently 60.000). This is subject to certain conditions and requirements, related with the maintenance of the shares, the type of company and other issues-

Additional information

The new Law introduces important changes not only in respect of Personal Income Tax, but also from a Corporate and Immigration perspective.

 

Should you want additional information you can contact to us at albeatax.com