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Modifications from 2022 onwards in the Impatriate Regime in Gipuzkoa (Beckham Gipuzkoa Law)

Oct 18, 2022 | Beckham Law

The regime for posted workers is regulated in Article 56 Bis of the Foral Regulation 3/2014, of January 17, on Personal Income Tax of the Historical Territory of Gipuzkoa, under the title “Special regime for posted workers” as of 2018.

The development of the article is regulated in the Foral Decree 33/ 2014, of October 14, in articles 1 to 6. 

The Foral Regulation 1/2022, of March 10, approving certain tax modifications for the year 2022 establishes some important novelties in the application of the regime for displaced or impatriated workers in Gipuzkoa (Basque Country) as from the 2002 tax year. 

As in the Foral Territory of Bizkaia, the Provincial Treasury of Gipuzkoa has improved its already beneficial “Beckham Law”. This improvement will be applicable both to new tax residents in the year 2022 (provided that they opt for it), and to taxpayers already included in the regime in previous years.

1- Main features

The regime for displaced persons is totally different from the rest of the regime in Spain. In Gipuzkoa, as in Bizkaia, it has a double benefit:

1. on the one hand it leaves a part of the salary exempt from taxation (30% from 2022, previously 15%) and, 

2. On the other hand, it exempts up to 20% of the taxable base of a series of expenses caused by travel. 

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2- Requirements for its application

  • To have spent the previous 5 years as a Tax Resident abroad.
  • The reason for the trip must be work-related, for the performance of qualified activities (those belonging to the Social Security Contribution Group 1).
  • That the activities carried out as qualified work are some of the listed ones: R&D, scientific, technical and financial. Since 2019, commercial activities have been included.
  • The work must be carried out for a Spanish company (located in Spanish territory, not necessarily in the Basque Country).
  • Work abroad is allowed if it does not exceed 15% of the work income (for example a person resident in San Sebastian has to travel 15% to work for a client).
  • Work abroad is allowed if it does not exceed 30% if the taxpayer undertakes work within the framework of the group companies abroad.
  • If the income cannot be counted, it will be counted per day (15% to 30%).

3- The novelties in Gipuzkoa of the “Beckham Regime”:”:

. The regime may be applied the year of the displacement and the following 10 years (it may be a total of 11 years).

  1. The exempt work performance is 30% as long as the work is included within the listed tasks.
  2. The improvements in this regime (extension to 10 years of application and 30% exemption) will be automatically applicable to all those taxpayers who have already applied the regime prior to 2022.
  3. The option to apply the regime will be made when the tax return is filed (in 2023). It must be made in each of the years of application.
  4. The tasks considered as qualified are increased, including to the already existing ones, the tasks of organization, management and economic-financial control.
  5. The exemption is applicable to the spouse or other members of the family unit.
  6. After the exemption has been applied, the expenses caused by the displacement are maintained as deductible expenses with the limit of 20% of the total income.
  7. If these expenses are paid as expenses in kind by the employer, the limit of 20% expenses will also apply.
  8. Deductible expenses are those incurred for the rental of housing (not mortgage), schooling, Basque and/or Spanish classes and trips abroad. It is not mentioned if the expenses for supplies (water, electricity) can also be included.
  9. The reason for the displacement can also be the creation of a start-up within a period of 2 years understood as an innovative entity (article 89.ter.one) and to maintain a personal involvement in the same, which does not have to be located in Guipuzcoa (if the tax residence of the founder). In these cases, it is necessary to obtain a binding report in order to benefit from this requirement issued by the SPRI or Economic Promotion of Gipuzkoa.
  10. The reason for the displacement may also be to set up an FCR or SCR and to be considered as a senior manager in the management company with the right to receive special economic rights (2 years from the displacement) a carried interest.
  11. The exemption derived from assets abroad (e.g. a lease in France or in the UK), will not be included in the tax trough the exemption mechanism. This exemption will be applicable to the members of the family unit, provided that they had been taxed under a tax analogous to the Personal income tax one and the country of origin is not a tax haven. There will be no right to deduction for double taxation.

4- Breakdown of deductible expenses with the limit of 20% of the total income.

  • Travel and moving expenses for the transfer. They must be made in the same fiscal year (not before).
  • Travel expenses to the country of origin (2 trips per year for the whole family unit).
  • Schooling expenses of the descendants for whom the deduction for descendants is applied.
  • Expenses for courses of Euskara and Spanish followed by the contributor and its familiar unit.
  • Expenses for renting their habitual residence in Gipuzkoa (the inclusion of supplies is not specified, as has been done

If these expenses are paid by the employer, they will not be considered as remuneration in kind, with the same limit of 20%.
The expenses must be duly justified within the IRPF declaration.

5- Work, tasks to which the regime applies

In general, it should be noted that the activities are those carried out by the worker, not by the company.

The tasks are included in the employment contracts within the group of contribution 1 of the Social Security: Engineers and Graduates. Senior management person, unless strictly limited to the position of administrators or directors.

The tasks define their content in different articles of the Norma foral de personas físicas or de sociedades. They are as follows:

  • R&D
  • Scientific and of a technical nature
  • Financial
  • Commercial (included from 2019)
  • Organization, management and economic-financial control (included from 2022)

If you have doubts regarding the application of the regime in your particular case, need to change the declarations of previous years or want more information, do not hesitate to contact us at [email protected].