Modelo 151 is the annual return of anyone who has opted into article 93, the Beckham regime, and the question we are asked is always the same: do I have to put this in? The short answer is that employment income goes in, wherever it comes from, and everything else goes in only if it has a Spanish source. The long answer has nuances that decide whether the regime is worth it for you or not.
The regime's rule, in one sentence
Someone under article 93 remains an IRPF taxpayer (the Spanish personal income tax), but works out the tax due under the rules of the IRNR, the Spanish non-resident income tax, with some special features. The most important of them is that all employment income obtained while the regime applies is treated as obtained in Spanish territory. It is not an exemption for foreign employment income: it is exactly the opposite.
The table that settles 80 % of the questions
| Income | Does it go into Modelo 151? | How it is taxed |
|---|---|---|
| Salary, bonus and benefits in kind, regardless of where they are earned | Yes | The regime's rates on the general base |
| Exercise of options and share awards from your employer | Yes, it is employment income | The regime's rates |
| Spanish-source pension or benefit | Yes | According to its nature |
| Dividends and interest from Spanish entities | Yes | Savings scale |
| Gain on selling a property located in Spain | Yes | Savings scale |
| Rent from a property located in Spain | Yes | The regime's rules, without the reductions of ordinary IRPF |
| Foreign-source dividends and interest | No | Left out while the regime lasts |
| Gain on selling foreign shares or funds | No | Left out while the regime lasts |
| Rent from a property located outside Spain | No | Left out while the regime lasts |
The source is set by where the income originates, not by the bank it is paid into or by the currency. A dividend from a Spanish company paid into a Swiss account is Spanish-source income and goes into Modelo 151. The gain on a Luxembourg fund paid into an account in Madrid is foreign-source and stays out. Moving the money somewhere else changes nothing, and believing that it does is how serious problems begin.
The employment income exception, which is the key to the regime
The fact that all employment income is treated as obtained in Spain has three practical consequences that are worth digesting before opting in.
The first is that there is no split by days. Under ordinary IRPF, a salary that pays for work done in two countries is apportioned according to the days worked in each. Under article 93 it is not: the share that would belong to the foreign country is also taxed here while the regime lasts.
The second is that a bonus or incentive received in Spain may reward a period before your arrival. Working out whether that income has been "obtained while the regime applies" is a question of accrual and timing, and it is one of those we have most often had to argue in writing.
The third is that the country where you did that work may want to tax it too. That is where the real risk of the regime appears: international double taxation of employment income, with rules for removing it that do not work in the same way as under ordinary IRPF. It is a point we always flag, and it has to be looked at with the other country's treaty in hand.
What does not apply, and costs money
- Personal and family allowance. There is none. The number of children and your age make no difference.
- Reductions on employment income, including the one for income generated over more than two years, which under ordinary IRPF softens the blow of an option exercise considerably.
- Most tax credits, national and regional, starting with the one for housing and the regional ones for families or donations.
- The exemption for work carried out abroad, the one that allows part of the salary of someone who travels for work to be left out. Under article 93 it is not available, and it is the loss that most surprises people who travel a lot.
What stays out is not always free
This is the nuance almost nobody mentions. A foreign dividend is not taxed in Spain while the regime lasts, but the country of origin will have withheld its own tax. And since that income does not go into your Spanish return, there is no international double taxation credit to apply: the foreign withholding stops being a payment on account and becomes a final cost.
The same happens with the possibility of reclaiming excess withholding from the country of origin under the treaty: if you are not resident for the purposes of that treaty in the way its tax authority expects, the refund may become complicated. We are not saying it is impossible; we are saying it has to be looked at before assuming that a foreign portfolio simply "is not taxed".
It does not release you from VAT if you carry on a business, nor from the census and formal obligations of that business, nor from social security, nor from the wealth tax, which you will pay on a territorial basis. It is the most expensive misunderstanding of the first year, and the one that leads someone to discover in October that three quarters have gone by without filing their VAT returns.
How it is filed
Modelo 151 is filed during the income tax campaign and it replaces Modelo 100, the ordinary return: the two do not coexist. There is no draft return to confirm, and the tax data the authority holds is not enough on its own, because the authority has no information about the foreign part of your salary. That means the return is built from scratch, with the payslip and with your employer's documents, and that the payments on account deducted are the ones actually withheld from you.
Hence the typical mismatch of the first year: if the payer did not receive the regime certificate in time, it will have withheld on the general scale, and Modelo 151 will come out as a refund or as a payment because of a difference that has nothing to do with what you earned and everything to do with how tax was withheld. How to avoid that is explained in Modelo 149.
Withholding, payments on account and the first year's result
Modelo 151 is settled by deducting what has actually been withheld from you. And in the first year that almost never matches what should have been withheld, because the payer takes time to apply the regime. That leads to the two typical outcomes: an unexpected refund, if you were withheld on the general scale and the regime is cheaper, or a sizeable payment, if the opposite happened.
It is also worth checking who withholds. A seconded employee who is still on the payroll of the foreign company may find that nobody withholds anything in Spain, and then the whole tax surfaces at once on the return. It is not a flaw of the regime: it is the result of the payer having no obligation to withhold here. You plan for it by setting the money aside, not by discovering it in June.
Property in Spain, which comes in differently
Someone under the regime who owns a home in Spain is taxed on whatever that home produces, but without the advantages of ordinary IRPF: no reduction for letting a home as a residence, no reinvestment exemption designed for the main home of an ordinary resident. The property comes in under the regime's rules, and that detail changes the return on letting it while the regime lasts.
And there is a point worth anticipating: selling a property located in Spain during the regime is Spanish-source income and is taxed here; selling the property you kept in your home country is not, while the regime lasts. It is another of those asymmetries where the date is worth money, and one of the reasons to look at the calendar before signing anything.
Two cases that come up again and again
The employee with equity from a foreign parent company. The share award goes into Modelo 151 as employment income, and the later sale of those shares, if they belong to a non-resident entity, stays out. Two moments, two opposite treatments, and an order that is worth understanding before you press the button: equity during the regime.
The director with dividends from his or her Spanish company. Pay as a director is employment income and goes into the regime's general base; the dividend from the Spanish company is Spanish-source income and goes to the savings scale. They are two flows with different rates, and how you split them is not neutral.
What we do with your Beckham regime
We prepare Modelo 151 from the Spanish payslip, from the foreign employer's documents where there are any, and from the inventory of Spanish-source income, and we set out in writing how the doubtful items are classified. Under this regime they are always the same ones: bonuses straddling two countries, equity and property income. We do not guarantee that the tax authority will share every classification; we guarantee that it will be reasoned and documented on the day they ask about it. Tell us about your case in the Beckham regime form.