Spain announces tax reform

Mariano Rajoy’s government has announced new tax reforms that will kick into touch tax breaks for wealthy footballers.

The Spanish Popular Party government (PP) initially approved a tax law in 2005 to enhance the country’s competitiveness and provide additional support to economic growth.

The tax decree originally aimed at bringing in highly skilled workers such as scientists and engineers from abroad, but it also attracted well paid foreign professional sportsman, who would pay income tax on all annual earnings at the minimum rate of 24 percent.

The move was coined “the Beckham tax Law”.

Jose Luis Zapatero’s socialist government established a new rule in 2010 to the law, and set a limit on annual income to €600,000, for foreign workers to be qualify for the 24 per cent tax rate in 2010,

This year’s new tax reform proposal includes cuts to Spain’s income and corporate tax rates, while foreign players, just like any Spanish taxpayers, will no longer benefit from the Beckham law if their income surpasses €60,000.