Spain has one preferential regime that works: the Beckham Law. For six years, a flat rate of 24% on your Spanish income up to €600,000, 0% on your passive foreign income, and exemption from Modelo 720.
For everyone else, Spain is a high-tax country: IRPF up to 54% in Valencia, 50% in Catalonia, 45% in Madrid, plus a solidarity levy on assets above €3 million.
On €200,000 in distributed profits, you pay approximately €80,000 in Spain and €34,505 in Cyprus. Beckham reduces the tax burden on earned income, not on business profits or pensions. And after six years, you fall back into the standard system. Anyone who wants to pay less in the long term moves to Cyprus.
| Subject | Winner | Why |
|---|---|---|
| Foreign worker or remote worker with Spanish employment income | Spain Wins | Beckham pays a flat 24% on Spanish income up to €600,000, plus 0% on passive foreign income. For six years. |
| Ordinary entrepreneur who distributes profits | Cyprus Wins | 17.3% total compared to approximately 40% in Spain with the SME CIT and dividend tax. |
| Pensioner with a private pension | Cyprus Wins | 5% flat tax versus progressive IRPF up to 47% or higher. Beckham does not apply to pensioners. |
| Attendance requirement | Cyprus Wins | 60 days compared to 183. |
| Net worth over €3 million | Cyprus Wins | Cyprus has a 0% wealth tax. Spain levies a Solidarity Levy of 1.7 to 3.5%, even in Madrid. |
| Term of the preferential regime | Cyprus Wins | Non-dom 17 years. Beckham only 6 years, then full IRPF. |
| Culture, gastronomy, language and lifestyle | Spain Wins | Larger market, more diversity, richer gastronomy, Spanish as a world language. |
| Cost of living | Regional | Madrid and Barcelona are more expensive than Limassol. Southern Spain and the interior are cheaper than Paphos. |
Beckham Law, situation 2026
The regime is officially the régimen especial para trabajadores desplazados (art. 93 IRPF), popularly known as the Beckham Law. It has existed since 2004 and was expanded by the Startup Law 28/2022 for remote workers and entrepreneurs of innovative start-ups.
| Element | Regulation |
|---|---|
| Tax rate on Spanish earned income | 24% flat up to €600,000, 47% above that |
| Foreign passive income | 0%: dividends, interest, rent, and capital gains from abroad are not taxed |
| Foreign earned income | Taxed, at the same 24 or 47% |
| Wealth tax | Only on Spanish assets, foreign assets exempt |
| Modelo 720 | Exempt during the six years |
| Term | Year of arrival plus five, so a maximum of six years |
| Prerequisite | No Spanish tax resident for five years, relocation due to work or entrepreneurship, application within 6 months of social security registration |
| Family expansion | Spouse and children under 25 can participate subject to conditions |
For a high-paid employee or remote worker with a salary of up to €600,000 and substantial foreign passive income. That combination gives you 24% on your salary and 0% on your dividends, interest, and rental income from abroad. For a director-major shareholder who distributes their own BV profits, or a pensioner, Beckham does little to nothing.
The biggest pitfall: people discover in year 7 that they are going to be taxed globally. In Catalonia, this results in a 50% tax on your entire worldwide income. In Valencia, 54%. In Cyprus, you have already been in the non-dom regime for seventeen years and pay 0% on that same foreign dividend. More on our page about tax residency and non-dom status.
Madrid offers a 100% discount on the regular wealth tax. However, the Solidarity Levy on large fortunes is a national levy that Madrid cannot offset. For assets exceeding €3 million worldwide, you pay 1.7% to 3.5%, regardless of where you live in Spain.
The levy was introduced in 2022 as a “temporary measure” and has been extended indefinitely since RDL 8/2023. It targets exactly the wealthy expat who thought they could evade wealth tax via Madrid. In Cyprus, there is a 0% wealth tax, and that remains 0% regardless of your assets.
| Tax | Cyprus | Spain (regular) |
|---|---|---|
| Corporate tax | 15% uniform | 25% standard, 23% for SMEs with less than €10M in turnover (decreasing to 20% in 2029), 15% for certified start-ups for 2 profit years |
| Dividend to shareholder | 0% for non-doms, only 2.65% GHS capped at €4,770 | 19% up to €6k, 21% up to €50k, 23% up to €200k, 27% up to €300k, 28% above |
| Tax-free allowance | €22.000 | Minimum personal approximately €5,550, lowest IRPF bracket 19% total |
| Top income tax rate | 35% above €72,000 | 45% in Madrid, 50% in Catalonia, 54% in Valencia, depending on regional surcharges |
| Foreign pension | 5% flat tax above the exempted first bracket | Progressive IRPF, no separate pension scheme for foreigners |
| Favorable regime for newcomers | Non-dom, 17 years, 0% on dividends, interest and rent Longer | Beckham Law, 6 years, 24% flat on Spanish employment income up to €600k |
| Wealth tax | No | Regional: 0% in Madrid, up to 3.5% in Catalonia and Valencia; thresholds from €500,000 to €1,000,000 |
| Solidarity levy on large fortunes | No | National: 1.7% to 3.5% on global wealth above €3 million, also in Madrid |
| Inheritance tax | 0% | Regional, highly variable, often low rates in the straight line; can rise to 34% outside the straight line |
| Crypto | 8% on each disposal (Article 20E) | 19% to 28% as savings income |
| Modelo 720 (declaration of foreign assets) | not applicable. | Mandatory above €50,000 per category, fines mitigated following 2022 EU ruling |
| VAT standard | 19% | 21%, with 7% IGIC in the Canary Islands |
| Days for tax residency | 60 Unique | 183 |
| Step | Cyprus (non-dom) | Spain (SME, regular) |
|---|---|---|
| Profit before tax | €200.000 | €200.000 |
| Corporate tax | €30.000 (15%) | €46,000 (23% SME rate) |
| Levy on benefit | €4,505 GHS | approximately €34,300 savings income brackets |
| Total tax | €34.505 Wins | approximately €80,300 |
| Net in your pocket | approximately €165,495 | approximately €119,700 |
| Effective pressure | 17,3% | approximately 40% |
A difference of nearly €46,000 per year. Beckham doesn't help here, because dividends from your own Spanish private limited company count as savings income and do not fall under the 0% exemption for foreign passive income.
Anyone wishing to distribute their profits does so in Cyprus for less than half the tax.
| Step | Cyprus (non-dom) | Spain (Beckham) |
|---|---|---|
| Gross earned income | €150.000 | €150.000 |
| Foreign dividend | €30.000 | €30.000 |
| Tax on earned income | progressive, after exemption €22k and 20/25/30/35%, approximately €40,000 | 24% flat = €36,000 |
| Tax on foreign dividends | 0% (non-dom) | 0% (Beckham) |
| Care contribution | €4,505 GHS capped at €4,770 | Compulsory social security, not capped at Cyprus level |
| Total tax and premiums indicative | approximately €44,500 Slightly cheaper | approximately €36,000 plus social security |
| Term of the regime | 17 years old Wins | 6 years |
Based purely on the tax rate for a high salary, Beckham is close to Cyprus and sometimes slightly cheaper. The real difference lies in what happens after year 6: in Cyprus, you remain in non-dom for another eleven years, whereas in Spain, you fall back to a progressive IRPF of 47 or 54% and your worldwide assets are taxed.
Anyone who wants long-term security chooses Cyprus. Anyone who wants to park for six years at 24% of their Spanish salary and then move on chooses Beckham.
We are based in Cyprus. However, there are four situations in which we would honestly send you to Spain.
| Situation | Why Spain |
|---|---|
| You have high Spanish earned income between €200,000 and €600,000 | Beckham's 24% flat on salary is very strong in Europe for this income range. |
| You set up a certified start-up | 15% corporate income tax during the first two profit years via Startup Law 28/2022. |
| You have a qualified business in the Canary Islands | The ZEC regime offers a 4% corporate tax rate for certain activities in the zone. |
| Culture, language, and market size weigh more heavily than the rate | 48 million inhabitants, world language, unparalleled infrastructure and gastronomy. |
Conversely: if you are a director/major shareholder distributing profits, a retiree, or someone who wants to optimize for longer than six years, Cyprus is the better choice in virtually every scenario.
For the average wealthy retiree, the choice between Madrid and Valencia often determines whether Spain makes sense at all. In Cyprus, that choice does not present itself: one system, no regional additions.
You can read more about how we assist with a move on the page about emigrating to Cyprus.
| Region | IRPF top rate | Wealth tax | Inheritance tax direct line |
|---|---|---|---|
| Madrid | 45% | 0% (100% discount), plus national Solidarity levy above €3M | High discounts, effectively low |
| Andalusia | 47% | 0% (100% discount), plus national Solidarity levy above €3M | 99% discount in the straight line |
| Catalonia | 50% | Fully, threshold €500,000 | Mediocre |
| Valencia | 54% | Fully, threshold raised to €1,000,000 in 2025 | Mediocre |
| Canary Islands | 50,5% | Full, threshold €700,000, plus ZEC for companies | High discounts |
Beckham is a strong regime for the right profile: high-paid employees and remote workers with substantial foreign passive income.
For anyone falling under that narrow definition, Spain can be fine for six years. For director-major shareholders distributing profits, pensioners, or anyone planning for the long term, Cyprus, with its non-dom status, is almost always cheaper, valid for a longer period, and legally simpler.
We are based in Paphos, know the rules of your home country, and do not work like a law firm. Since 2024, we have helped 100+ clients in more than ten countries, with a 4.8 out of 5 on Google.
I took the step myself and guided 100+ people through the same choice. You get an honest answer, even if that is Italy.
Relevant information
You pay a flat rate of 24% on your Spanish employment income up to €600,000 (47% above that) and 0% on foreign passive income such as dividends, interest, rent, and capital gains. Wealth tax applies only to your Spanish assets, you are exempt from Modelo 720, and the regime lasts six tax years (year of arrival plus five). Conditions: not a Spanish tax resident for five years, application within six months of social security registration.
No. Beckham is intended for employees, remote workers, and start-up entrepreneurs who move to Spain for that reason. Pensioners are not eligible and therefore fall under the progressive IRPF, with a marginal rate of up to 45% (Madrid), 50% (Catalonia), or 54% (Valencia). In Cyprus, a pensioner pays a 5% flat tax on foreign pensions above the exempted first bracket.
You revert to the standard Spanish system: globally taxed on progressive IRPF, global wealth tax, and Modelo 720 mandatory above €50,000 per category. For those living in Catalonia or Valencia, this means a top rate of 50 or 54%. In Cyprus, you remain in non-dom for another eleven years at that point.
Madrid offers a 100% discount on the regular wealth tax. However, the national Solidarity Tax on Large Fortunes (ITSGF) still hits you on assets exceeding €3 million worldwide, with rates ranging from 1.7 to 3.5%. Madrid cannot compensate for that. In Cyprus, the wealth tax is 0%, and it will remain 0%.
For a director-major shareholder distributing profits, no: approximately 40% in Spain compared to 17.3% in Cyprus. For a high-paid employee under Beckham, both come close together. In the long term, Cyprus wins because the non-dom status lasts 17 years, whereas Beckham's lasts only six.
Yes, provided the dividend comes from a foreign source and you fall under Beckham. Foreign passive income is not taxed in Spain during the six years. Please note: dividends from your own Spanish BV do not count as foreign, even if you are Dutch or Belgian.
In Spain, 183 days is required to become a tax resident or to demonstrate that your center of vital interests lies there. In Cyprus, 60 days suffice under the 60-day rule, provided you do not stay in any other country for more than 183 days, are not a tax resident anywhere else, and work, manage a company, or hold a residence in Cyprus.
Cyprus, with 8% on every disposal since Article 20E. Spain taxes crypto profits as savings income at 19 to 28%. Under Beckham, foreign crypto profits are taxed at 0% as long as you are in the regime, which may temporarily appeal to crypto traders. After six years, you fall back to 19 to 28%.
For three reasons. First: the Solidarity Levy still hits you above €3 million, even in Madrid. Second: Beckham lasts six years, non-dom seventeen. Third: in Cyprus you pay 17.3% on distributed corporate profits compared to around 40% in Spain, and 5% on your pension compared to progressive IRPF. The Madrid wealth tax trick solves only one of three tax concerns.
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