A Spanish law designed to attract foreign sports stars such as David Beckham with tax privileges has been done away with in the conservative People’s Party government’s latest tax reforms.
A 2005 tax decree was known as the “Beckham Law” after the English footballer became one of the first international athletes to take advantage of it when he signed for Real Madrid in 2006.
The law allowed him and other sports stars to pay tax on all income at a flat rate of 24 percent. Other individuals faced a rate climbing to 43 percent.
The Local quoted the Spanish daily ABC on the effects of the law: “Real Madrid’s ‘galácticos’ would pay the taxes of a mileurista (word in Spanish to describe somebody who scrapes by on €1,000 a month).”
Now football stars will pay the same 45 percent tax rate as anyone else earning more than €60,000 a year.
The People’s Party (PP) tax reforms come 18 months after investigating judges discovered foreign bank accounts worth €26.5m (£21m) controlled by former senator and party treasurer Luis Bárcenas. These were thought to be party slush funds, although this has been denied by the PP. Investigations are still continuing.