Quick Facts
- Location: Community of Madrid only
- Benefit: 20% tax deduction on investments
- Minimum Residency: 6 years in Madrid
- Prior Residency: Not a Spanish tax resident for 5 years
- Effective: January 1, 2024
Overview
The Mbappé Law (Law 4/2024) is a Madrid regional tax incentive designed to attract foreign talent and investment. Named after the French football star who moved to Real Madrid, this law offers a powerful tax deduction for individuals who establish tax residence in the Community of Madrid and make qualifying investments.
This is a regional IRPF deduction available only to taxpayers assigned to the Community of Madrid under the standard Spanish tax system.
Requirements
- Must not have been a Spanish tax resident during the previous 5 years
- Must establish tax residence in the Community of Madrid from January 1, 2024 onwards
- Must maintain tax residence in Madrid for at least 6 consecutive years
- Must be taxed under standard IRPF (not under the Beckham Law special regime)
- Must make qualifying investments in approved asset categories
- Investments must be made within specified timeframes
Qualifying Investments
The law recognizes several categories of eligible investments:
- Real Estate: Property acquisitions in the Community of Madrid
- Securities: Shares and participations in Spanish companies
- Public Debt: Spanish government bonds and securities
- Business Investment: Capital contributions to Madrid-based businesses
- Venture Capital: Investments in approved venture capital funds
Tax Benefits
The key benefit is a deduction from the regional portion of personal income tax (IRPF):
- 20% deduction based on the value of qualifying investments
- Applied to the regional (Madrid) portion of income tax
- No cap on deduction amount (subject to tax liability)
- Particularly beneficial for high-net-worth individuals with significant investment income
Mbappé Law vs Beckham Law
Both laws target new residents, but they are mutually exclusive—you must choose one or the other:
- Beckham Law: National special regime with flat 24% tax rate on Spanish-source income. You are taxed under non-resident rules, which means regional deductions like the Mbappé Law do not apply.
- Mbappé Law: Regional Madrid deduction requiring standard IRPF taxpayer status. Offers 20% deduction on qualifying investments but you pay progressive tax rates on all income.
Which is better? It depends on your income mix. The Beckham Law typically favors those with high salary income from Spanish sources. The Mbappé Law may be better for those with significant investment income or foreign assets, since standard IRPF allows more flexibility with deductions and foreign tax credits.
Our Services
Our tax lawyers can help you determine whether the Mbappé Law or Beckham Law is right for your situation. We provide:
- Eligibility assessment and comparative tax impact analysis
- Personalized recommendation based on your income mix (salary vs. Investment vs. Foreign)
- Investment structuring advice for maximum deduction under Mbappé Law
- Annual tax filing support to claim the deduction
- Compliance monitoring throughout the 6-year period
Ready to Optimize Your Taxes?
Book a consultation with our tax team to explore your options.