The special regime for workers posted to Spain, popularly known as the “Beckham Law”, continues to be a constant source of tax debate. One of the most controversial issues in recent years has revolved around whether taxpayers covered by this regime should be taxed on the imputation of property income in relation to their habitual residence in Spain.
The answer has come in the form of a clear ruling by the Central Economic-Administrative Tribunal (TEAC) on 17 July 2025, which has established binding criteria in administrative proceedings. According to this ruling, impatriates who own urban property in Spain, provided that it is not used for economic activities, must declare the corresponding imputed income, even if it is their habitual residence. The tax base is calculated by applying 2% or 1.1% of the cadastral value, depending on whether or not it has been revised.
The TEAC’s central argument is the literal wording of Article 13.1.h) of the Consolidated Text of the Non-Resident Income Tax Law (TRLIRNR). This rule considers income obtained in Spanish territory to be that attributed to urban properties not used for economic activities, without providing for any exception for the habitual residence. Consequently, the exemption enjoyed by ordinary residents under Article 85 of the Personal Income Tax Law does not apply to those who pay tax under the Beckham regime. As clarified by the Court, the reference from the IRNR to the IRPF only has an effect on calculating the amount of imputed income, but not on defining the taxable event or introducing exclusions that are not expressly provided for by law.
This administrative criterion conflicts with the interpretation upheld by the ruling of the High Court of Justice of Madrid of 6 May 2024, which had understood the exemption provided for in the IRPF for the primary residence to be applicable by analogy. According to that ruling, the purpose of the Beckham regime should be interpreted in line with the general logic of the tax, thus avoiding discriminatory treatment. However, in daily administrative practice, the position of the TEAC prevails, which is binding on the Tax Agency and the lower economic-administrative courts. Although the Madrid ruling provides strong arguments for a possible judicial appeal, it does not change the reality of ordinary tax proceedings.
From a regulatory point of view, the TEAC’s reasoning is based on the strict application of the law. Article 93 of the Personal Income Tax Law, which regulates the regime for impatriates, establishes that they are taxed as personal income tax payers, but largely following the rules of the IRNR. Thus, the taxable event is defined independently in the TRLIRNR and does not include exemptions not expressly provided for by the legislator. In the opinion of the TEAC, there is no legal loophole, but rather a deliberate decision: if the legislator had wanted to extend the exemption for the habitual residence to impatriates, it would have stated so explicitly.
Despite this, the issue remains open in the judicial sphere. There is no shortage of arguments in favour of the extensive application of the income tax exemption, invoking principles such as equality under Article 14 of the Constitution or the fundamental freedoms of European law. It has also been pointed out that in other countries, the habitual residence is not taxed through the imputation of income, which reinforces the criticism of the Spanish solution. However, to date, neither the Supreme Court nor the Court of Justice of the European Union has ruled on this matter, so the TEAC doctrine continues to be the mandatory reference in administrative proceedings.
In practical terms, the immediate consequence for taxpayers under the Beckham regime is clear: they must include the imputed income from their primary residence in their tax returns. Failure to do so could result in adjustments and penalties by the authorities. Those who wish to litigate and defend the application of the exemption must necessarily resort to contentious-administrative proceedings, assuming the uncertainty that still surrounds this issue.
In conclusion, the TEAC ruling of 17 July 2025 marks a turning point in this matter. It confirms that the habitual residence of impatriates is not exempt from the attribution of property income and that the exemption provided for ordinary residents does not apply to them. Until there is a change in legislation or a ruling by the Supreme Court correcting this interpretation, the official position of the Treasury is clear and binding
