Nov. 3 (Bloomberg) -- Soccer stars such as Real Madrid’s Cristiano Ronaldo and other high-earning foreigners will pay a lot more in Spanish taxes after the ruling Socialists and other parties agreed to scrap a tax break, lawmakers said.

High-income foreigners, who had enjoyed a reduced tax rate of 24 percent, will pay the full 43 percent imposed on wealthy residents after an agreement reached today in Madrid between the ruling Socialists, the United Left and the Galician Nationalist Bloc, Francisco Jorquera, the Galician party’s parliamentary spokesman, said in an interview.

The tax break, passed in 2005 to lure foreign executives to Spain, had been dubbed the “Beckham Law” and was back-dated to July 1, 2003 -- the day after David Beckham transferred to Real Madrid from Manchester United. Lawmakers had tried to lift taxes on foreign footballers last June after Real Madrid signed Ronaldo for a world-record fee during Spain’s worst recession in six decades. An initial agreement was shelved.

Today’s deal, hashed out during budget negotiations in Madrid, will allow those earning less than 600,000 euros a year ($880,000) to keep the lower rate, Jorquera said. It also will extend a 400-euro ($587) tax rebate to those who earn less than 8,000 euros a year.

The government had planned to scrap the rebate as it tries to cut one of Europe’s biggest budget deficits. A proportionally lesser rebate will be given to those who earn between 8,000 and 12,000 euros a year, Montserrat Colldeforns, a Socialist member of parliament, said in a telephone interview.

Spain’s government, which has committed to reduce its budget deficit to 3 percent of gross domestic product in 2012 from an estimated 9.5 percent this year, plans to raise value- added tax next year and increase levies on income from capital. The budget bill is making its way through parliament, where the Socialists lack a majority and need support from other parties to get legislation approved.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at erossthomas@bloomberg.net

Last Updated: November 3, 2009 11:28 EST