How my pension from Belgium is taxed in Spain

Understanding how pensions from Belgium are taxed in Spain

When you become tax resident in Spain, your worldwide income becomes subject to Spanish personal income tax (IRPF). That means that your pension from Belgium, whether it is a state pension, an occupational pension or a private pension, must be declared in Spain once you are resident for tax purposes. Spain does not distinguish between “domestic” and “foreign” pensions for the purpose of including them in your tax base: if the income is a pension and you are resident, it belongs in the Spanish return.

In practice, this means that your pension from Belgium will be added to any other income you have in Spain, such as Spanish pensions, rental income, investment returns or employment income. The total is then taxed at progressive rates that increase as your income goes up. There may be small exemptions and allowances for low pensions or for people with only one payer, but most Belgium pensions exceed these thresholds and therefore become fully taxable in Spain. Understanding this worldwide taxation principle is the first key step when planning a move from Belgium to Spain.

Spanish tax residency and worldwide income rules for Belgium pensions

Spain generally considers you tax resident if you spend more than 183 days in Spanish territory in a calendar year, or if the centre of your vital interests (economic or family) is located in Spain. Once you meet the residency conditions, your obligation to declare worldwide income applies, regardless of whether Belgium already taxes your pension at source. This often comes as a surprise to new residents, who assume that a pension taxed in Belgium will not be taxed again in Spain.

For Belgium pensioners, the timing of when they become Spanish tax resident is crucial. If you move late in the year, only part of your annual pension may fall within the Spanish tax net for that first year. Conversely, if you arrive early in the year, Spain may tax almost the entire year’s pension from Belgium. Coordinating your move date, residency status and pension start date can avoid unnecessary double taxation and give you more control over your effective tax rate.

How pensions from Belgium are taxed in Catalonia

A resident in Catalonia with a pension from Belgium is taxed under the national IRPF rules plus the regional scale approved by the Catalan authorities. In other words, the same pension from Belgium would be taxed slightly differently in Catalonia than in another autonomous community. The progressive brackets and rates applied to general income, including foreign pensions, are a combination of state and regional tranches. Higher combined rates may apply to middle and upper income levels.

If you receive a Belgium pension in Catalonia, you must declare the gross amount in euros, before any Belgium withholding, on your Spanish tax return. If Belgium has deducted tax at source and a double tax treaty exists, you may be able to claim a foreign tax credit in Spain, reducing your Spanish liability. However, the credit is usually capped at the Spanish tax attributable to that pension. It is therefore important to check whether continuing withholding in Belgium is efficient, or whether it is better to apply for reduced or zero withholding in Belgium based on treaty residency in Spain.

Catalan residents with larger Belgium pensions should also consider the impact on other aspects of their tax position, such as means-tested benefits, deductions or allowances that phase out as income rises. The pension from Belgium may push overall income over certain thresholds, triggering surcharges or reducing the effectiveness of certain deductions. A detailed Catalonia-specific calculation is advisable before or shortly after becoming resident.

How pensions from Belgium are taxed in Andalucia

Residents in Andalucia with pensions from Belgium are subject to the same national IRPF framework, but apply the Andalusian regional scale. This can result in slightly different marginal rates compared to Catalonia or Comunidad de Madrid, particularly at the middle and higher tranches of income. For a Belgium pensioner, the exact place of residence within Spain therefore becomes a genuine tax planning variable.

In Andalucia, the pension from Belgium is still treated as general income and added to other sources. If you also receive a Spanish pension, both are aggregated and taxed together. In the presence of a Spain–Belgium tax treaty, Andalucia-based residents should ensure that the treaty is correctly applied to avoid double taxation. Often, the treaty will assign taxing rights primarily to Spain as the state of residence, while allowing Spain to credit any Belgium tax withheld.

Because Andalucia has its own approach to wealth tax and, in some cases, regional surcharges and deductions, Belgium pensioners living there should also consider the interaction with wealth and succession planning. For example, a large capital sum in a Belgium retirement plan could trigger wealth tax, while the regular annuity payments are taxed via IRPF. Coordinating asset location, pension withdrawals and wealth tax thresholds can provide meaningful savings over time for retirees living in Andalucia.

How pensions from Belgium are taxed in Comunidad de Madrid

For residents of Comunidad de Madrid with pensions from Belgium, the same logic applies: worldwide income is taxable in Spain and pensions from Belgium are treated as general income. However, Comunidad de Madrid applies its own regional tax scale and has become known for certain regional benefits, especially in wealth tax and inheritance tax planning. While income tax rates remain progressive, the overall burden may differ compared to Catalonia or Andalucia for the same Belgium pension.

A resident of Comunidad de Madrid receiving a pension from Belgium must still declare the gross Belgium pension in euros on the Spanish return, aggregated with any other income. If a tax treaty exists, Spain is usually the main taxing jurisdiction, so Belgium withholding might be reduced or eliminated once Spanish residency is established. Where Belgium continues to withhold, the Spanish resident in Madrid can typically claim a credit, provided the correct documentation is available.

Because Comunidad de Madrid has a more favourable wealth tax regime than many other regions, pensioners with significant savings or retirement capital in Belgium often find Madrid attractive. However, the wealth tax position must be distinguished from the income tax treatment of pensions. The pension income from Belgium will still be taxed annually under IRPF, regardless of the wealth tax benefits. Combining treaty planning, pension timing and regional advantages can produce a more efficient long-term structure for Belgium retirees in Madrid.

How the Spain–Belgium tax treaty affects pension income

The existence of a tax treaty between Spain and Belgium is a central element in determining how pensions are taxed. Most modern treaties follow the OECD model and include a specific article dealing with pensions. Typically, private and occupational pensions are taxable only in the state of residence, meaning that once you become tax resident in Spain, Spain has primary taxing rights over your Belgium pension. This allocation helps to prevent double taxation.

However, some treaties distinguish between government pensions, social security pensions and private pensions. For example, certain government pensions from Belgium may remain taxable only in Belgium or only in Spain, depending on the treaty wording and the capacity in which the work was performed. It is therefore essential to classify each type of Belgium pension correctly: state pension, social security, occupational scheme, government pension or private annuity. Misclassification can lead to either overpayment or underpayment of tax in both jurisdictions.

Where Belgium continues to withhold tax on a pension that should be taxable only in Spain under the treaty, the retiree may be able to reclaim Belgium tax or apply for reduced withholding based on Spanish residency. At the same time, Spain normally allows a credit for any Belgium tax that is legitimately due under the treaty. Analysing the treaty article, matching it to the specific pension type and then aligning withholding and credits is one of the most important steps in planning retirement from Belgium to Spain.

Government pensions from Belgium and special cases

Government pensions from Belgium often receive special treatment under tax treaties. These may include pensions paid to former civil servants, military personnel, police officers or other public sector workers. Many tax treaties provide that such pensions are taxable only in the paying state (Belgium), while private-sector pensions are taxable only in the state of residence (Spain). But the exact rule depends on the specific Spain–Belgium treaty text.

For a Belgium government pensioner living in Catalonia, Andalucia or Comunidad de Madrid, this can mean that the main Belgium of taxation remains Belgium, even though they are fully resident in Spain. In such circumstances, Spain may exempt the pension but take it into account for determining the applicable rate on other income (exemption with progression), or Spain may apply a foreign tax credit mechanism. The practical outcome is that government pensions from Belgium must be analysed separately from ordinary pensions, and the result may differ significantly between treaty and non-treaty situations.

Reporting obligations and wealth tax implications for Belgium pensions in Spain

Besides income tax, Belgium pensioners living in Spain must comply with Spanish reporting rules. If the value of a retirement plan or pension fund in Belgium exceeds the relevant thresholds, it may need to be disclosed in Spain on foreign assets reporting forms such as Modelo 720. The obligation concerns the underlying capital value, not only the annual pension payments. Failing to report when required can attract severe penalties, so monitoring portfolio values in Belgium is critical.

In addition, wealth tax (and, where applicable, the new national solidarity tax on large fortunes) may apply when a resident’s net assets exceed the relevant thresholds. The capitalised value of certain Belgium pension arrangements may be included in the wealth tax base, depending on their legal form and accessibility. Here, regional differences become particularly important: Catalonia, Andalucia and Comunidad de Madrid all have their own wealth tax rules, scales and, in some cases, reductions or rebates. A Belgium pensioner with significant savings must therefore assess not only income tax but also wealth tax exposure in their chosen region.

Planning considerations for Belgium pensioners moving to Catalonia, Andalucia or Comunidad de Madrid

For pensioners from Belgium, choosing where to live in Spain can have a substantial impact on lifetime tax costs. Catalonia, Andalucia and Comunidad de Madrid each apply different regional tax scales, deductions and wealth tax policies. A pensioner with a relatively modest Belgium pension and few savings may focus primarily on income tax brackets, while a pensioner with large retirement capital may focus more on wealth tax thresholds and inheritance planning. Both aspects should be analysed together.

Timing is another key planning factor. Some Belgium pensioners choose to begin drawing their pension before becoming tax resident in Spain, particularly in cases where lump-sum payments are tax-efficient in Belgium. Others delay or restructure their pension to take advantage of residency in Spain and the treaty provisions. The right choice depends on the treaty, the nature of the Belgium pension, the regional tax rates in Spain and the individual’s wider financial circumstances.

Lump sums, annuities and mixed models for Belgium pensions in Spain

Many pensions from Belgium can be taken as a lump sum, an annuity, or a combination of both. Each option has a different tax profile in Spain. A large lump sum received after becoming tax resident in Spain can push the taxpayer into the highest marginal tax bracket in the year of receipt. Conversely, spreading the pension as an annuity over several years may keep the taxpayer in lower brackets, smoothing the tax burden.

From a wealth tax perspective, drawing a lump sum may reduce the value of the underlying pension asset but increase bank balances or investment portfolios, which are also taxable. Keeping the pension capital inside a Belgium retirement vehicle may, in some cases, influence how the asset is valued for wealth tax purposes. Selecting the right balance between lump sum and annuity, and choosing the timing relative to acquisition of Spanish tax residence, is therefore a central part of tax planning for Belgium retirees in Spain.

Common mistakes Belgium retirees make when moving to Spain

One of the most frequent mistakes Belgium pensioners make is assuming that a pension taxed in Belgium will not be taxed again in Spain. Without reviewing the Spain–Belgium treaty, some retirees fail to declare their Belgium pension in Spain, resulting in back taxes, interest and penalties when the omission is later detected. Another common error is ignoring regional differences within Spain, not realising that Catalonia, Andalucia and Comunidad de Madrid may produce different tax bills for the same income and wealth profile.

A further mistake is to leave Belgium withholding in place when it should be reduced or eliminated under the treaty, leading to unnecessary double taxation and the administrative burden of reclaiming tax from Belgium. Others forget to monitor the value of their Belgium pension funds for Spanish reporting and wealth tax purposes. Failing to file required foreign asset reports or wealth tax returns on time can generate penalties that are often disproportionate to the underlying tax itself.

When to seek professional advice on Spain–Belgium pension taxation

Given the interaction of residency rules, domestic law, double tax treaties, regional tax scales, wealth tax, and reporting obligations, it is rarely advisable to navigate Spain–Belgium pension taxation alone. The optimal solution for a pensioner in Catalonia may differ from that for a similar pensioner in Andalucia or Comunidad de Madrid, simply because of regional rules and personal circumstances. A detailed simulation comparing different regions and timing scenarios can reveal large differences in long-term net income.

Professional advice is particularly valuable before you trigger important pension decisions, such as taking a lump sum, purchasing an annuity, transferring a pension, or changing residency between Belgium and Spain. A coordinated approach that integrates tax, legal and estate planning considerations will normally produce better results than isolated decisions.

To receive personalised international tax advice, contact us via the following link:http://wa.me/34644121802