Can I keep the Beckham Law if I cut my employment contract to a few hours a month and invoice the rest through my foreign company?

The special tax regime for workers relocated to Spain, known as the Beckham Law, allows you to pay Spanish income tax (IRPF) under rules borrowed from the Impuesto sobre la Renta de no Residentes (Spanish non-resident income tax). A common question from those already on the regime is whether they can reduce their employment contract and invoice the rest of their services through their own company, often a foreign one.

Is there a minimum number of hours in the employment contract?

No. The law sets no minimum number of hours. The requirement under article 93.1.b).1º of the Spanish Income Tax Act (LIRPF) is that the move to Spain results from an employment contract with an employer in Spain, in the first year the regime applies or the year before. If that condition was met when you relocated and opted into the regime, later reducing your hours to just a few a month does not, in itself, mean losing the Beckham Law. Your employer will continue to withhold 24% on your salary (47% on the portion above €600,000).

The real risk: invoicing through a company

The issue is not the hours but how the rest of your income is classified. The regime is incompatible with earning income through a permanent establishment in Spain (article 93.1.c LIRPF). Under article 113.2 of the Income Tax Regulations (RIRPF), the only business activities permitted within the regime are:

• entrepreneurial activity;
• services to start-ups;
• training or research and development activities on the terms provided.

If the tax authority concludes that the consultancy invoiced by a foreign company is in fact your own professional activity carried out in Spain, with the company merely acting as an intermediary, you would be excluded from the regime. That risk increases when most of your income shifts to the company and the employment contract becomes little more than token.

Precautions if you choose this structure

• The consultancy services must be genuinely different from the duties under your employment contract.
• The company must have real substance and must not be managed day to day from Spain. Otherwise it could be deemed tax resident in Spain or to have a permanent establishment here.

What if I become self-employed?

Registering as self-employed (autónomo) to carry on an ordinary professional activity in Spain is not compatible with the Beckham Law (article 93.1.c LIRPF and article 113.2 RIRPF).

Consequences of breaching a requirement

If any condition is breached:

• the exclusion takes effect for the entire tax year in which the breach occurs;
• you must notify the Spanish Tax Agency (Agencia Tributaria) within one month;
• you cannot opt into the regime again (articles 118.1, 118.2 and 118.5 RIRPF).

That is why it is advisable to review any change to the way you work before agreeing it with your employer or clients.