UHY FAY & CO, a leading firm in international tax advisory, has achieved a significant milestone by successfully applying the Beckham Law for an American digital nomad who moved to Spain with a Nomad Visa. Despite facing legal and administrative hurdles, this case exemplifies how expert advice can overcome complex tax barriers.
The process lasted several months due to dealings and appeals with the Tax Agency and Social Security, with the main obstacle being the lack of the Social Security certificate, an essential requirement for accessing the Beckham regime. This difficulty arose because the Social Security Agreement between Spain and the U.S. does not cover the category of international teleworkers, leaving the taxpayer in a legal void and creating an administrative blockage.
The Beckham Law, crucial in this case, is a tax regime that allows individuals to pay a fixed reduced tax rate of 24% on income earned in Spain, providing a significant incentive for expatriates and digital nomads, facilitating their settlement and reducing their tax burden.
The main challenge was the absence of the Social Security coverage certificate issued by the U.S., a formal requirement to access the regime. U.S. authorities confirmed that their agreement with Spain does not cover the issuance of this document for teleworkers, causing uncertainty and halting the process.
Despite this obstacle, UHY FAY & CO managed to have the Tax Agency accept the exceptional situation, granting the tax regime without the certificate and without being registered in the Spanish Social Security system. This result was made possible through a solid legal strategy and in-depth knowledge of international regulations.
This case:
• Sets a precedent for future similar cases.
• Highlights the need to review and update bilateral agreements.
• Demonstrates the importance of expert and personalized advice.
Currently, the draft of the new Social Security Agreement between the U.S. and Spain still does not provide solutions for teleworkers, leaving uncertainty about future cases. This experience underscores the need for regulatory adaptations to address the new realities of remote work.
This situation highlights the importance of being well-advised before undertaking international mobility. To avoid similar obstacles, we recommend:
• Reviewing tax regulations before any relocation.
• Consulting with experts in international taxation.
• Evaluating bilateral Social Security agreements and their implications.
What our clients are saying:
At UHY FAY & CO, our clients value our commitment and expertise in resolving complex international tax cases:
• “Thanks to the UHY FAY & CO team, I was able to solve a tax issue that seemed impossible. Their knowledge and dedication made all the difference.” M.P
• “Trusting UHY FAY & CO was key. Their professional approach and ability to work with the authorities allowed us to achieve an exceptional outcome.” J.B
• “UHY FAY & CO not only solved our case, but also guided us every step of the way. Their expert advice was invaluable.” K.L
Pitu Domecq Manuel Reina Manuel Berral Luis Herrero
Partner Tax & Legal Director Tax Senior Manager Tax Manager Tax
idp@uhy-fay.com mri@uhy-fay.com mbp@uhy-fay.com lhp@uhy-fay.com
+34 914 260 723 +34 952 764 065 +34 958 873 700 +34 914 260 723
