More and more senior professionals are relocating to Spain to take up executive roles in subsidiaries of multinational groups, often bringing with them an asset that rarely appears on the payslip but may represent a very significant part of their total compensation: stock options. The intersection between this instrument and the Special Regime for Inbound Workers, commonly known as the Beckham Law, creates one of the most complex and, at the same time, most relevant tax scenarios in Spain today.
At Certus, we have worked extensively on this area. What follows reflects the key criteria that, in our experience, are critical to sound tax planning.
What is the Beckham Law, and why does it matter for executives with stock options?
Article 93 of the Spanish Personal Income Tax Law allows individuals relocating to Spain for work to be taxed for up to six years under the rules of the Non-Resident Income Tax regime, at fixed rates of 24% on the first €600,000 of employment income and 47% on any excess, with taxation limited to income obtained in Spain. For an executive receiving compensation in shares or options, this has major implications: the regime can lead to very significant tax savings compared with the standard Spanish Personal Income Tax regime, but only if the different elements of variable remuneration are handled correctly.
The key issue: when are stock options taxed, and on what amount?
The gain realised on the exercise of stock options — that is, the difference between the market value on the exercise date and the exercise price — is treated as employment income for Spanish tax purposes. Under the Beckham Law, that income is taxed at 24%, provided that, together with the rest of the individual’s employment income, it does not exceed the €600,000 threshold. So far, that is the general rule.
The real issue arises when an executive arrives in Spain with options that were granted previously and had already been vesting for several years in another country. Is the full gain taxable in Spain? Only part of it? None of it?
The DGT’s position: proportional partial taxation
The Spanish Directorate-General for Taxation (DGT) addressed this issue in Binding Ruling V0813-23, dated 5 April 2023, establishing a criterion with direct practical relevance: employment income derived from the exercise of stock options is only subject to the Beckham regime in proportion to the activity carried out from the date of relocation to Spain onwards. The portion of the income that relates to services performed before the move falls outside the taxable base of the regime, based on Article 114.2(a) of the Personal Income Tax Regulations.
The formula resulting from this criterion is as follows:
Income subject to the Beckham regime = Total income × (days spent in Spain during the vesting period / total days in the vesting period)
This means that three very different tax scenarios may arise:
Options fully vested before the move to Spain
All the activity that generated the entitlement took place outside Spain. Result: no Spanish tax liability.
Options with mixed vesting (starting before the move and completed afterwards)
Only the proportion corresponding to the vesting period elapsed after arrival in Spain is taxable in Spain. Depending on the timeline, the tax saving may be very substantial.
Options granted and fully vested during the period covered by the regime
The full gain is taxable under the Beckham rate on 100% of the benefit.
Complexity increases significantly where mergers and plan conversions are involved
In practice, stock option plans are rarely straightforward. It is common to find cases where the executive holds several grants awarded in different years, with different vesting conditions — whether time-based, performance-based or mixed — and where, in addition, the company has gone through a merger or reorganisation that resulted in one plan being converted into another.
Each of these situations adds a further layer of analysis: it is necessary to determine whether the conversion triggered a taxable event in the original jurisdiction, how the original vesting conditions carry over into the new plan, and what the relevant reference date is for the proportional calculation derived from V0813-23.
Our experience has shown that these cases do not lend themselves to standard solutions. Each structure requires an individual assessment combining a detailed review of the plan documentation, the vesting history and the tax rules of all the jurisdictions involved.
Our approach: analysis from day one
At Certus, we approach the taxation of stock option plans under the Beckham Law as an ongoing process, not as a one-off tax filing exercise. That means reviewing the plan documentation before exercise, calculating the taxable proportion in line with V0813-23, coordinating with tax advisers in the original jurisdiction — typically to deal with exit tax issues and double tax treaties — verifying the withholding mechanisms applied by the paying company, and designing an exercise strategy that minimises the overall tax burden within the legal framework.
If you are an executive relocating to Spain with stock options still pending exercise, or if you manage the international mobility of senior talent within your organisation, we would be delighted to review your specific situation.
Frequently asked questions about stock options and the Beckham Law
Are my stock options taxable in Spain if they were granted before I moved?
They may be fully taxable, partly taxable or not taxable in Spain at all, depending on when the right was actually earned and where the work was carried out during the vesting period. The grant date alone does not resolve the issue.
Does the Beckham Law apply to the entire gain?
Not always. If the vesting period was international, the usual approach is to analyse what portion of the income relates to days worked in Spain.
What if I worked in two or three countries during vesting?
It will usually be necessary to apportion the income according to the earning period in each jurisdiction and also review the relevant double tax treaty.
What happens if I leave Spain before selling the shares?
You need to separate the employment income that already arose at exercise from any later capital gain on sale. Leaving Spain does not automatically erase tax that has already arisen.
When do I pay tax: on grant, vesting, exercise or sale?
It depends on the type of incentive. For non-transferable stock options, the key point is usually exercise. For RSUs, it is usually actual delivery or vesting. And the later sale may create an additional capital gain.
Are RSUs and stock options taxed in the same way?
Not exactly. They are similar in that both usually form part of employment compensation, but the taxable event does not always arise at the same moment or through the same mechanism.
Can the same income be taxed in two countries?
Yes. That is exactly why it is essential to review the relevant treaty, the available tax certificates and the possibility of claiming relief for international double taxation.
What documentation might the Spanish tax authorities request?
In most cases, they will want to understand the timeline of the right: grant, vesting, exercise, valuation, international mobility and the basis for the calculation reported.
Does it matter whether the shares come from a foreign parent company or a Spanish subsidiary?
Yes, but not automatically. The decisive factor is not only which entity issues the shares, but also which entity employs you, where you worked during the vesting period and what real link exists between the plan and your employment activity.
What if the company has been acquired or the plan has been replaced?
You need to review whether there was an exchange, cancellation, cash-out, accelerated vesting or continuity from the old plan into the new one. This is one of the situations where the original documentation matters most.
Quick glossary: a practical map to navigate the article
This section is not intended to explain the whole article again, but to provide a quick reference. If a technical term comes up while reading, here is a short and direct definition.
Equity plan concepts
Stock options: the right to buy shares at a pre-agreed price.
RSU: a promise of future share delivery if conditions are met.
RSA: shares delivered subject to restrictions or a risk of forfeiture or repurchase.
Phantom shares: a cash incentive linked to the value of the company.
ESPP: an employee share purchase plan, usually with a discount.
Grant: the date on which the incentive is awarded.
Vesting: the period over which the right is earned.
Cliff: the initial period during which nothing has yet vested.
Exercise: the moment the option is exercised and the shares are bought.
Exercise price / strike price: the pre-agreed price at which the shares can be bought.
Exercise and sell: exercise followed by an almost immediate sale.
Exercise and hold: exercise followed by continued holding of the shares.
Sell-to-cover: an automatic partial sale to cover tax or other costs.
Net settlement: delivery of the net result after deducting costs or tax.
Good leaver: a departure from the company with more favourable treatment.
Bad leaver: a departure that results in loss of rights or penalties.
Liquidity event: a transaction that allows the incentive to be monetised, such as a sale or IPO.
Tax concepts
Beckham Law: the common name for the special tax regime under Article 93 of the Spanish Personal Income Tax Law.
Inbound expatriate regime / impatriate regime: the technical name for the Beckham regime.
Market value: the value of the share on the relevant exercise or delivery date.
Employment income: income linked to the employment or professional relationship.
Employment income in kind: employment income received in the form of assets or rights rather than cash.
Capital gain: profit that may arise later, for example when the shares are sold.
Time apportionment: allocation of income according to time worked in each country.
International double taxation: a situation in which two countries tax the same income.
Double tax treaty: an agreement between states allocating taxing rights and reducing double taxation.
Mobility and compliance
International vesting: a vesting period during which the beneficiary works in more than one country.
Form 149: the form used to opt into the Beckham regime and report certain changes.
Form 151: the annual return filed by individuals taxed under the special regime.
