Beckham Law vs Mbappé Law (Madrid): which one is for you

If you are moving to Madrid from abroad you will hear about two tax incentives: the Beckham Law, Spain’s special regime for people who move here to work, and the so-called Mbappé Law, a Madrid deduction for new residents who invest. They are often mentioned together. They are not two versions of the same thing, and you cannot have both.

What the Beckham Law is

The Beckham Law is the special regime of article 93 of the Personal Income Tax Act (Law 35/2006, LIRPF). If you qualify and opt in, you are taxed under the non-resident income tax (IRNR) rules while keeping your status as an income tax (IRPF) taxpayer, for the tax year in which you become resident and the five following years.

In practice:

• Employment income is taxed at a flat 24% up to €600,000, and at 47% above that.
• Foreign income other than employment income stays outside Spanish income tax.
• In exchange you give up the personal and family allowances and practically all deductions.
• It applies wherever you live in Spain, Madrid included.

To qualify you must not have been resident in Spain in the five previous tax years, and your move must be caused by one of the situations the law lists: an employment contract (including remote work for a foreign employer), becoming a company director, an entrepreneurial activity, or highly qualified professional services for start-ups. You opt in with Modelo 149 within six months of your Social Security registration (or of the date on your certificate of coverage). There is no extension.

What the “Mbappé Law” is

The nickname refers to Law 4/2024, of 20 November, of the Community of Madrid (published in the Madrid Official Gazette on 28 November 2024). It adds article 17 bis to Madrid’s consolidated text on ceded taxes (Legislative Decree 1/2010) and creates a regional income tax deduction for investments by new taxpayers coming from abroad.

According to the Spanish Tax Agency’s manual for the deduction:

• It is a deduction of 20% of the acquisition value of the investment, including the expenses and taxes that come with the purchase and excluding interest.
• It is for people who become IRPF taxpayers resident in Madrid from 1 January 2024 and who were not resident in Spain in the five years before the change of residence.
• Eligible investments are debt securities and equity securities, traded or not.
• The investment must be made in the year you move or the following year, and held for six years, keeping your tax residence in Madrid.
• For unlisted companies there are further conditions: the entity cannot be based in a tax haven, the stake cannot exceed 40%, and you cannot hold executive or management functions or an employment relationship in it.
• If you stop being resident in Madrid or sell before the six years, you lose the deduction.

It is not a regime you opt into. It is a line in the regional part of your standard income tax return.

Why you cannot combine them

The Madrid deduction lives inside the standard IRPF calculation, in its regional part. The Beckham Law replaces that calculation: your tax is determined with the non-resident rules, with a flat rate and without the allowances and deductions of the standard tax, regional ones included. Once you are in the Beckham regime there is no regional quota for the Madrid deduction to reduce.

So if you settle in Madrid you are choosing between two routes:

1. Opt into the Beckham Law, and give up Madrid’s deduction (and the other regional deductions) for as long as you are in the regime.
2. Stay in the standard IRPF, and claim Madrid’s deduction if you make and hold an eligible investment.

Keep in mind the timing. The Beckham decision has to be made within six months of your registration. Madrid’s deduction depends on an investment you can make that year or the next. In most cases you will have to decide on Beckham before you have made the investment.

Who each one suits

The Beckham Law usually fits people who:

• Move to Spain for a job, a posting, remote work for a foreign employer or a directorship, and meet the five-year rule.
• Earn most of their income as a salary, particularly a high one.
• Keep investments or other income abroad that they would rather leave outside Spanish income tax.
• May settle anywhere in Spain, not only in Madrid.

Madrid’s deduction usually fits people who:

• Are becoming tax resident in Madrid specifically.
• Plan to invest a meaningful amount in eligible securities within their first two tax years and can hold the investment for six years.
• Do not qualify for the Beckham Law, for example because their move does not fit any of its causes, or who find that the regime gives them little at their income once allowances are counted.

Neither list replaces doing the numbers for your own case. We do not publish savings figures for this comparison because the result depends on your salary, your other income and the size of the investment.

Side by side

How to decide

1. Check whether you qualify for the Beckham Law at all. Our free diagnosis tells you in five minutes and gives you your Modelo 149 deadline.
2. Compare the Beckham rate with the standard tax on your salary in the savings calculator, with Madrid as your region. Madrid has the lowest regional scale in Spain, so the Beckham saving there is smaller than elsewhere (what else changes in Madrid).
3. Be honest about the investment. Madrid’s deduction only matters if you will actually make an eligible investment in time and keep it for six years.
4. Decide before the six-month deadline, and if the answer is not obvious, ask a registered tax advisor to run both scenarios with your figures. You can get a fixed quote before paying anything.

This article is general information, not tax advice.

Sources

• Law 4/2024, of 20 November, of the Community of Madrid (BOE-A-2025-3302)
• Madrid Official Gazette (BOCM) no. 284, 28 November 2024
• Spanish Tax Agency: deduction for investments by new taxpayers coming from abroad (Community of Madrid)
• Spanish Tax Agency: special regime for impatriates, art. 93 LIRPF
• Law 35/2006 on Personal Income Tax (consolidated text, BOE)