Tax on Pensions

There are what is known as double taxation agreements between Spain and Ireland and Spain and Germany (see links at the end of this script). Basically what this means is a deal has been made between Spain and a foreign country that aims to help the foreigner in the Spanish territory avoid paying twice the same tax already generated and paid at source.

https://www.dfa.ie/irish-embassy/spain/our-services/new-to-spain/tax-in-spain/#:~:text=There%20is%20a%20double%20taxation,regional%20governments%20and%20local%20municipalities

https://sede.agenciatributaria.gob.es/Sede/en_gb/ayuda/manuales-videos-folletos/folletos/folletos-residentes-rentas-extranjeras/alemania.html

The following links will provide you with lots of information on taxable income and the current rates of tax in Spain:

https://sede.agenciatributaria.gob.es/Sede/en_gb/ciudadanos-familias-personas-discapacidad/residentes-rentas-procedentes-extranjero/obtencion-pensiones-procedentes-otro-pais.html

https://costaluzlawyers.es/blog/paying-income-tax-on-foreign-pensions-in-spain/#:~:text=In%20Spain%2C%20income%20tax%20is,12%2C451%20%E2%80%93%20%E2%82%AC20%2C200%3A%2024%25

https://balcellsgroup.com/taxes-on-pensions/

Hi 

I can't give a complete answer, but I can tell you my situation.

I have a UK personal pension fund and take a monthly income which I have deliberately set at just below the threshold for paying income tax in Spain (which is around €12k a year (for me at least - the tax system is complicated and can vary depending on individual circumstances)).

This is enough for me, since my partner has more or less the same income - meaning that neither of us pays any tax. This also has the knock-on effect of giving us free prescriptions.

There are plenty of retired Germans in the area - it shouldn't take long for you to meet some who can help.

Hope this helps!

Cheers

Steve

As a resident in Spain you will be taxed on your worldwide income which includes pensions. In UK you complete a Spanish personal tax form (FD9) which tells the HMRC not to levy tax on your income. I assume there will be a similar system to Germany.

The only pensions that remain taxed in your previous countries are those classed as government pensions (or in UK Crown pensions) which include Armed Forces, Police, Civil Service etc. These are declared, but not taxed, in Spain and used to assess the level of tax you pay. They do not cover state pensions or, as we used to call it, the Old Age Pension.

Whichever way, you will end up paying tax twice for a period of time in your home country and in Spain but your home country will reimburse you the tax paid eventually. 

Hi, I receive a small German state pension every month.  After communicating my change of address to the German pension people, they now write to me each year enclosing a form which has to be stamped and signed by an official Spanish notary each year to prove that I'm still alive.

I pay tax on this German pension to Germany each year.  I pay it online to the German pension service for overseas residents with a debit or credit card.

https://www.finanzamt-rente-im-ausland.de/en/pay-online/ 

Hello Pauline. Thank  you for your reply. I too receive the annual 'proof of life' form in Ireland and pay my tax on the German pension to the German authorities. I just wondered if it was a different system in Spain.

May I ask, do you have to declare your German pension to the Spanish tax people? I don't see the point if you are paying directly to Germany. 

Well, yes, we have to declare all income that we receive annually, whatever the source.   I guess you would submit.your proof that you've paid your German tax to your Spanish asesor or whoever does your Spanish tax return for you.