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 article 17 bis and 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 securities representing the transfer of own capital to third parties (debt) and securities representing a share in the equity of any entity (shares and fund units), traded or not.
• The investment is made in the year you become tax resident in Madrid or the following year. For securities of Spanish companies the year before also counts, if you hold them until you become resident.
• The investment is held for six years. You may sell if you reinvest the whole proceeds within one month in securities that also qualify.
• The deduction is applied against the regional tax quota of the year of the investment and, if it does not fit, against that of the five following years, after the other regional deductions. There is no limit other than that quota.
• You must remain an IRPF taxpayer resident in Madrid until the last year of the holding period. If you stop being one, or sell without reinvesting everything, you lose the deduction already applied.
• For unlisted companies there are further conditions: the entity cannot be based in a tax haven, the stake cannot exceed 40% on any day (adding your spouse and relatives up to the second degree), and you cannot hold executive or management functions or an employment relationship in it.
• It cannot be combined, for the same investments, with Madrid’s deductions in articles 15 and 17 of the same text.

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

Which investments count: what Madrid’s rulings say

Madrid’s Directorate General for Taxes published two binding rulings in January 2026 that answer common questions from people arriving from abroad:

• CTE 03-25/R: UCITS ETFs, equity or bond, listed or not and bought through a US bank, count as a share in equity.
• CTE 25-25/R (a Spaniard returning to Madrid in 2024 after fourteen years in the United States): securities and funds of foreign issuers qualify; the law sets no condition on the residence or nationality of the intermediary, so a foreign broker is fine; you can invest in several purchases within the two tax years; and real estate does not qualify.

We do not tell you what to invest in. Choosing specific products is investment advice, a service reserved for firms authorised by Spain’s securities regulator (CNMV).

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.

Could you opt into Beckham in the first year and renounce it later to invest with the deduction? Article 17 bis does not mention the regime, and we have found no published criterion on that sequence. Do not plan on it unless a professional has studied it with your figures: renouncing the regime cannot be undone.

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. The table below gives you the starting point.

How much you need to invest for the deduction to win

The arithmetic is simple. The deduction gives back 20% of what you invest; the Beckham Law saves, every year, the difference between the standard IRPF and 24%, for six years. The deduction beats the regime when 20% of the investment exceeds six years of that saving, that is, when you invest about 30 times what Beckham would save you each year.

With our savings calculator, for a taxpayer with employment income only, no children, in Madrid:

Illustrative, with the calculator’s scales and the same salary for all six years. At all these salaries, six years of regional quota are enough to absorb the whole deduction.

Below a salary of about €64,000, the Beckham Law saves nothing in Madrid, so the deduction wins with any eligible investment.

Treat it as a floor. Under the Beckham Law, dividends, interest and gains from a portfolio abroad are not taxed in Spain; under the standard IRPF they are, including those of the investment you make for the deduction. That difference favours the regime and the table leaves it out. It also leaves out the allowances for children, which lower the figure (with children the regime saves less), and the large-fortunes tax and Modelo 720, covered below.

If you are a US citizen

Madrid’s deduction does not change what you report to the IRS, which still taxes your worldwide income. And there is a well-known trap: funds and ETFs domiciled outside the United States, UCITS ones included, are usually PFICs (passive foreign investment companies) for the IRS, with very unfavourable tax treatment and their own forms. Before investing for the deduction, check it with whoever prepares your US return.

Wealth tax and Modelo 720

• Wealth tax: Madrid relieves it in full.
• Solidarity tax on large fortunes: a state tax, still in force (it was extended with no end date). It taxes the part of net assets above €3 million, after a €700,000 exempt amount, and in Madrid there is no wealth tax to offset against it. Under the standard IRPF it reaches all your assets, wherever they are; under the Beckham Law, only assets and rights located in Spain.
• Modelo 720: under the standard IRPF, as a resident, you report your assets abroad if they exceed €50,000 in any block (accounts, securities, property). Under the Beckham Law you do not file it.

With large assets abroad, these two lines can weigh more than the deduction. It is one more reason to run the full numbers before deciding.

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. Multiply the calculator’s annual saving by 30: if you will not invest at least that, in time, and hold it for six years without leaving Madrid, the deduction does not beat the regime.
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)
• Binding ruling CTE 03-25/R, Directorate General for Taxes of the Community of Madrid (UCITS ETFs, in Spanish)
• Binding ruling CTE 25-25/R, Directorate General for Taxes of the Community of Madrid (foreign issuers and intermediaries, in Spanish)
• Law 38/2022, of 27 December, creating the temporary solidarity tax on large fortunes (BOE, consolidated text)
• IRS: Form 8621, return by a shareholder of a PFIC
• Spanish Tax Agency: special regime for impatriates, art. 93 LIRPF
• Law 35/2006 on Personal Income Tax (consolidated text, BOE)