Mbappé Law: New tax benefit for foreign investors moving to Madrid

The Government of the Community of Madrid intends to approve a new deduction of the Personal Income Tax (IRPF) addressed to foreign investors moving their residency to the region of Madrid.

This deduction is colloquially known as “Mbappé Law”, due to its similarity with the moment of approval of the special tax regime colloquially known as “Beckham Law”, since the next Real Madrid player could be one of the new beneficiaries of this tax advantage.

Recently, the Preliminary Draft Bill amending the Consolidated Text of the Legal Provisions of the Community of Madrid has been published.

This Draft Bill indicates that individuals residing overseas that move to live in the region of Madrid will be able to apply a deduction of 20% of the acquisition value (including expenses and taxes) that have been paid in the investment o

      • Securities representing the assignment to third parties of own capital, whether traded or not on organized markets (meaning loans, bonds, etc.).

      • – Securities representing the participation in the equity of any type of entity, whether traded or not on organized markets (meaning listed or unlisted shares or any other financial investment).


        1. In case of investment in non-listed entities:

      The entity may be incorporated in any country, except in the case of tax havens. Therefore, we confirm that the investment in these assets does not need to be located in Spain.

      Likewise, it is established that the maximum participation on these entities will be 40% of the stake, either individually or together with the spouse or relatives. Besides, the taxpayer may not perform executive or management functions, nor maintain an employment relationship in the entity in which the investment is made.

          1. Term of the investment:

        The investment must be made in the year of acquisition of tax residency in Madrid or in the following year. In the case of investments in Spanish entities, the investment is allowed to be made in the year prior to the acquisition of tax residency.

            1. Investment maintenance period:

          The investment must be maintained for six years. Transfers before this period are allowed but provided that such amounts are reinvested within one month.

          The taxpayer must maintain the condition of tax resident in Madrid for six years.

              1. Previous residency:

            The taxpayer cannot have lived in Spain five years prior to the movement to be eligible for this regime.

            Period of application

            The deduction may be applied in the year in which the tax residency is acquired or in the following five years in case of insufficiency of tax liability.

            The deduction will be applicable to all tax periods beginning on or after January 1, 2024, regardless of the date of entry into force of the Law. That is, it will apply to foreigners who move and acquire tax residency in Madrid in the year 2024 and subsequent years.


            The Draft does not contemplate the acquisition of properties among the assets that allow the deduction, which goes in the same direction than the foreseeable elimination of the Golden Visa anticipated by the Federal Government.

            The entry into force of this new regional deduction increases the tax incentives available to foreigners moving to Spain. And together with the special tax regime (Beckham Law) reinforces the development of a favorable environment for the attraction of foreign capital into Spain.

            The Draft Bill introducing this autonomous deduction does not contemplate any quantitative limit to the amounts to be invested. Meaning any amount is allowed.

            This deduction could lead to a total reduction of the amount to be paid in Personal Income Tax to the Region of Madrid. It would be possible to carryforward the pending deduction amount in the following five years.

            With this new deduction it is possible to reach an effective taxation similar to the Beckham Law regime, although in order to be a beneficiary of this new tax benefit it is not necessary to have a job that allows the taxpayer to apply for the regime. It is only necessary to invest in the indicated assets.

            Due to the incompatibility in the application of the Beckham Law and the Mbappé Law, the taxpayers should decide which regime could be more advantageous.

            In SLNYC we are at your disposal to assist you on your movement to Spain.

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