In the ruling of the High Court of Justice of Madrid of May 6, 2024, there has been a change of criteria regarding the exemption on income obtained (imputation of income) from urban real estate located in Spanish territory not affected by economic activities to persons who are covered by the special regime for displaced workers of article 93 of the LIRPF (Beckham Regime).
The substantial note provided by the ruling focuses essentially on the habitual residence and how it is taxed is in the IRNR.
The current administrative criterion reflected in numerous responses to queries from the General Directorate of Taxes interpreting the Non-Resident Income Tax Law concluded that those who pay tax on said tax under the special regime known as the Beckham Law do not reside in Spain, so they cannot apply the exemption of the habitual residence with respect to presumed income from real estate capital, forcing the displaced worker to pay taxes on the presumed income attributable to his "habitual residence".
This criterion is the one currently followed by the Tax Administration
However, with the Judgment of May 6, 2024, there is a change in the criterion with respect to the current administrative criterion, recognizing that people covered by the special tax regime for displaced workers (Beckham Regime), precisely “acquire tax residence in Spain”, are tax residents although they are taxed under an optional special regime.
In conclusion, a taxpayer covered by the special regime for displaced workers is a tax resident in Spain and must be allowed to access the exemption for the habitual residence in the category of presumed real estate income.
Obviously, this opens the possibility to request a refund of undue income for the taxation suffered by taxpayers in this situation, although we recommend waiting for this criterion to be confirmed with more favorable rulings, paying special attention to the statute of limitations.