2005: Spain Passes ‘Beckham Law,’ Giving Millionaire Footballers Massive Tax Break

The Spanish government passes what will become known as the “Beckham Law.” The law grants a tax break to wealthy foreigners earning over €600,000 who work in Spain—they will pay only 24 percent income tax, whereas Spaniards earning the same amount pay 43 percent. The initial aim is to attract talented executives, but the biggest effect is on Spanish football, as the tax break allows Spanish clubs to attract high-paid players from elsewhere in Europe where there are higher tax rates. The law gets its nickname from Real Madrid midfielder David Beckham, who joined the club shortly before the tax break came into operation. A later Spanish administration will announce the end of the law’s application (see November 4, 2009). [Xinhua News Agency (Beijing), 11/4/2009]