Tax Guide for Foreign Retirees in Spain

Criteria for Acquiring Tax Residence in Spain

Tax residence: main requirements. In Spain, a person is considered a tax resident if they meet at least one of these official conditions from the Tax Agency: staying more than 183 days during the calendar year in Spanish territory, or having the main core of their activities or economic interests in Spain. Likewise, by legal presumption, if your non-separated spouse and minor children depend on you and habitually live in Spain, you would also be considered a Spanish tax resident (unless proven otherwise). In other words, spending at least half a year in Spain or moving your economic and family life here usually implies being a tax resident. The official and complete definition of tax residence can be consulted below.

Since when is one a tax resident? An important point is that tax residence is attributed for full calendar years. If you meet the criteria in a given year, Spanish law will treat you as a resident for that entire fiscal year (the fiscal year coincides with the calendar year). For example, if you arrived in Spain in 2025 and stayed more than 183 days that year, you will be considered a tax resident of Spain from January 1, 2025 (not from the date of arrival). There is no such thing as "partial tax residence for part of the year": you are either a resident taxpayer all year, or you are not. This implies that, once the day threshold is reached or the center of interests is established in Spain, you must pay taxes here on the income of that entire year, even that obtained before moving. This is a detail to take into account for your tax planning: it is sometimes convenient to schedule the move for the beginning of the year to avoid overlaps. An International Tax Lawyer in Spain can advise you on the best time to establish your residence, so that you optimize your tax situation and avoid surprises.

Migratory procedures to reside in Spain. Tax residence is not exactly the same as legal/migratory residence, although they are related. To live more than 183 days in Spain (and therefore be a tax resident), you first need authorization to reside in the country. If you are a citizen of the European Union (for example, German, Dutch, or Polish), you have free entry and stay; you only have to register in Spain if your stay exceeds 90 days, obtaining a registration certificate for an EU citizen and your NIE (Foreigner Identification Number). On the other hand, if you come from a non-EU country (for example, the United States or the United Kingdom since Brexit), you must manage a residence visa. The typical option for retirees is the non-lucrative residence visa, which allows you to live in Spain without working. This visa requires demonstrating sufficient financial means (approx. €30,000 per year for a single person, as 400% of the IPREM is required as stable minimum income) and having private health insurance, among other requirements. It is requested at the Spanish consulate in your country of origin and, once approved, upon arrival in Spain you obtain the Foreigner Identity Card (TIE) as a resident.

There are also other routes: golden visa for investment, family reunification visas, etc., but for most retirees, the non-lucrative route is the most common. In any case, it is essential to obtain legal residence, since a person can have a residence permit without being a tax resident and vice versa. However, if your plan is to retire and live permanently in Spain, it is normal for both statuses to coincide. A sympathetic tone: we know that these migratory procedures can be cumbersome, but after completing them you can enjoy your retirement in Spain with peace of mind. You can always count on professional advice (an International Tax Lawyer in Spain can collaborate with immigration lawyers) to facilitate the entire process.

Taxation of International Pensions in Spain

Tax residence and worldwide income. Once you are considered a tax resident in Spain, you will pay taxes here on your worldwide income. This means you must declare all income obtained anywhere in the world in Spain, including, of course, foreign pensions that you collect, whether public or private. But don't be alarmed! This is done without prejudice to what is established in the double taxation treaty between Spain and the country of origin of the pension. In other words, Spain taxes your foreign pensions, but applying the rules of the bilateral treaty to avoid double taxation if one exists. Almost all the countries mentioned (U.S., U.K., Germany, the Netherlands, Poland, etc.) have current tax treaties with Spain to protect taxpayers from paying twice for the same income. Below we will explain how these DTA (Double Tax Agreements) treaties work with practical examples.

Public pension vs. private pension: tax treatment. Double taxation treaties usually distinguish between pensions derived from public employment (public sector) and private employment pensions. This distinction is crucial to know where your pension is taxed:

• Public pensions (for services provided to the State, administrations, or the public sector of the country of origin, for example, a pension from a former government official) generally only pay taxes in the country of origin. That is, if you receive a pension as a former public employee of your country, the treaty usually grants the country that pays the pension (your country of origin) the exclusive right to tax it. Consequently, Spain does not tax that pension again; here it would be exempt from IRPF, although with exemption with progression in many cases. The exemption with progression means that, if apart from that pension you have other income that does pay taxes in Spain, the exempt pension will be added to your income for the purpose of calculating the applicable tax rate for the other income (the tax percentage goes up according to the bracket, but the pension itself does not pay twice). Important: a common exception is that, if you obtain that foreign public pension but also acquire Spanish nationality, then Spain could exclusively tax it (the clause in the treaties indicates that the exclusivity of the country of origin does not apply if the beneficiary is already a national of the country of residence). In short, for most non-naturalized foreign retirees, government pensions from their country are excluded from the Spanish tax base.

• Private pensions (derived from employment in private companies or the general social security system not linked to public employment) normally pay taxes in the country of residence, that is, Spain has the main authority. According to the treaties, these pensions are usually subject exclusively to Spanish IRPF and the country of origin does not tax them (unless a particular exception is agreed upon that allows shared taxation, as we will see in some countries). This means that your foreign private pension will be treated the same as a Spanish pension for IRPF purposes: it is considered employment income in your annual income tax return and will be taxed according to the progressive tables of the IRPF. If the country of origin withheld taxes on that pension, then Spain must avoid double taxation by giving a credit or deduction, or by applying an exemption as the case may be. In general, when both countries tax a private pension, Spain as the country of residence grants a credit for the tax paid abroad (deduction for international double taxation of Article 80 LIRPF). But we insist: the typical thing with treaties is that private pensions only pay taxes in Spain, and the country of origin does not practice withholdings if you prove that you are a resident in Spain. Be sure to inform your pension payer abroad of your new tax residence (by means of a Spanish tax residence certificate) so that they adjust the withholding as required by the treaty.

Below, we will see the differences depending on the country of origin of your pension, since each international treaty has nuances. The previous principles (public pension is taxed at origin; private pension is taxed at residence) are general, but we will review the specific features country by country for the U.S., U.K., Germany, the Netherlands, and Poland.

Estimations by Country of Pension Origin

United States: The Spain-U.S. treaty has an important nuance: the U.S. incorporates a clause known as a saving clause. According to this clause, the United States reserves the right to continue taxing its citizens and residents as if the treaty did not exist. What does this imply? That if you are a retired U.S. citizen in Spain, the U.S. tax authorities can continue to collect taxes on your U.S. pension (since the U.S. taxes by citizenship). Don't panic, because double taxation is still avoided, but in these cases, it is up to the U.S. to grant you the tax credit. For specific pensions:

• If it is a U.S. government pension (e.g., federal, state, military service retirement), the treaty states that it is only taxed in the U.S. and Spain exempts it with progression, unless you acquire Spanish nationality, in which case it would only be taxed in Spain.

• If it is a private or U.S. social security pension, it is generally only taxed in Spain. However, the treaty allows U.S. Social Security payments (for example, Social Security) to also be subject to tax in the U.S. In that case, Spain will give you a deduction for double taxation in the Spanish IRPF for the federal taxes actually paid in the U.S. In practice, this means that if you receive a Social Security pension, the U.S. could withhold a tax (generally 30% of a part of the benefit for non-residents, according to U.S. regulations), and then when you do your tax return in Spain, you would deduct that foreign tax from your Spanish tax liability, avoiding paying twice. Given the complexity of U.S. taxation (citizenship, different types of benefits), it is highly recommended to rely on an International Tax Lawyer in Spain with experience in U.S. cases, to properly coordinate your obligations with both tax authorities.

United Kingdom: Spain and the United Kingdom have a treaty updated in 2013 (in force since 2014) that follows the standard OECD structure. According to the Spanish-British Treaty (BOE 15/05/2014):

• British public pensions (for services to the government, e.g., retirement of a British civil servant) are taxed exclusively in the United Kingdom, being exempt in Spain with progression. Only if you were also a Spanish citizen and resident would the rule be inverted to pay taxes only in Spain.

• Private or UK social security pensions are taxed only in Spain as the country of residence. This includes the British State Pension (contributory public pension) which, not being derived from employment in the public sector, is assimilated to a "private" pension for the purposes of the treaty. In practice, if you receive a British pension, HMRC (United Kingdom) should not withhold tax once you prove residence in Spain, and you will declare and pay the IRPF here. It is advisable to send the relevant Spanish tax residence form to the British payer (for example, the form that HMRC requires, usually completed with a Spanish tax residence certificate issued by the Tax Agency).

As a result, a UK retiree in Spain will normally only pay taxes to the Spanish Tax Agency on their private British pensions. Example: John, a tax resident in Spain, collects a British company pension of £15,000 per year. The United Kingdom does not withhold taxes on the pension thanks to the treaty, and John must include that income (about €17,000) in his Spanish IRPF declaration. If he has no other income, and considering that €17,000 exceeds the exempt minimum to declare, John will file his Form 100 (Income Tax Return) and pay the corresponding Spanish tax. His British State Pension, if he had one, would not pay IRPF here (exempt) but would increase the rate applicable to the other pension. In this case, there is no double taxation: each pension pays tax only once, in one country or another.

Germany: The current Spain-Germany treaty (renewed in 2011, in force since 2013) also distinguishes clearly:

• German public pensions (e.g., retirement of a German civil servant, payments from a Land or municipality) are taxed only in Germany and are exempt in Spain (with progression), except for beneficiaries with Spanish nationality (in which case they would be taxed here).

• Private or German social security pensions: generally only pay taxes in Spain. However, the treaty with Germany introduced a particularity: Germany can tax certain social security pensions* paid to residents in Spain up to a reduced limit (5% of the gross amount until 2029, and 10% from 2030). This applies to pensions whose right to receive them is generated from 2015 onwards. That is, for some recent German retirements, Germany reserves a small tax. In those cases, Spain is still the main country of taxation, but if Germany applies that 5%/10%, Spain will allow you to deduct that German tax in your IRPF. In practice, for most German pensioners who retired before 2015, Spain is the only country that will tax their pension. If your German pension falls into the case of partial taxation at source (post-retirements after 2015, etc.), it is advisable to confirm the figures and procedures with a tax advisor. Germany usually withholds the tax automatically, and you then apply the tax credit in your Spanish declaration.

Netherlands (Holland): The treaty between Spain and the Netherlands is old (1971) but effective. According to official interpretations:

• A Dutch pension from private employment is taxed exclusively in Spain (residence) and the Netherlands cannot tax it. That is, your "normal" Dutch pension is declared only to the Spanish Tax Agency as employment income, without double taxation.

• In contrast, a pension originating from services provided to the Dutch State (public sector, such as former civil servants, armed forces, etc.) can be taxed by the Netherlands according to the treaty. Spain in that case exempts that pension from the IRPF (applying exemption with progression). In summary, a public pension from Holland pays tax there and is exempt here; a private Dutch pension pays tax only here. Practical example: Marieke worked for a company in Amsterdam and is now retired and living in Alicante; she collects €20,000 from a private Dutch pension. The Netherlands does not withhold taxes from her (once her Spanish residence is presented) and Marieke declares the €20,000 in Spain, paying IRPF here according to her scale. If instead of a company she had been a civil servant for the Amsterdam city council, her pension would be subject to Dutch tax and Spain would not tax it, avoiding double taxation through an exemption.

Note: There is no special clause for Spanish nationality in this treaty (since it is old), so the scheme applies as is, regardless of the beneficiary's citizenship. In any case, if you end up obtaining Spanish nationality, it is advisable to review the situation with professional help, because the interaction of regulations can change.

Poland: The treaty between Spain and Poland follows similar patterns. In general: Polish private pensions of a resident in Spain are taxed only in Spain (residence), while pensions paid by the Polish State (public sector) may be subject to taxation in Poland, being exempt from IRPF in Spain through progression. In practice, if you are a retired Pole in Spain, your pension from the ZUS (Polish Social Security) will be declared here and Poland should not tax it (you would present the Spanish tax residence certificate to the ZUS each year so they apply the treaty). On the other hand, if you receive a pension as a former Polish civil servant or former military member, Poland would withhold the tax and Spain would not charge you again for that income. The Spanish Labor Office in Poland summarizes this situation as follows: "Pensions are taxed in the country of residence, taking into account the Treaty between Spain and Poland to avoid double taxation. To avoid double taxation, the tax residence certificate must be presented annually to the ZUS or the INSS." That is, everything depends on where you are a tax resident; in that country you will pay the taxes on your pension, presenting certificates to the counterparty so they do not tax it twice. In any case, it is recommended to verify specific details of the Spanish-Polish Treaty (you can consult the official text on the BOE or Ministry of Finance website). If you have complex questions, an International Tax Lawyer in Spain can clarify how your specific case applies under this treaty.

Tax Obligations in Spain for a Resident Retiree

IRPF Declaration (Form 100). As a tax resident, each year you must evaluate whether you are obligated to file the income tax return (IRPF). In Spain, the IRPF declaration (Form 100) is filed between April and June of the year following the fiscal year (for example, the income of 2024 is filed in the spring of 2025). Not all people are obligated to declare; it depends on the income. For pensioners, the main criteria are the limits on employment income. If your pensions (and other employment income) exceed certain amounts, you must file a declaration. By regulation, if you have a single pension payer and did not exceed ~€22,000 gross per year, you could be exempt from declaring; however, be careful!: in the case of foreign pensions, the payer does not withhold on account of the Spanish IRPF, which effectively lowers the threshold to €14,000 per year in many situations. In practice, Hacienda indicates that when the payer is a foreign body with no obligation to withhold, the limit for declaring is reduced (one example: a resident with a single U.S. or UK pension of more than €14,000 had to declare). This is because the lack of withholdings equates the case to that of two payers for threshold purposes. Recommendation: if your foreign pension exceeds ~€14,000 per year, plan to file the Spanish income tax return. Even if it is slightly below, it may be convenient to file it voluntarily to reflect your tax situation clearly (and even more so if you have deductions that result in a refund).

When making the declaration, foreign pensions are included as employment income. If any is exempt by treaty (e.g., a public pension taxed only at source), it must still be recorded in the section on exempt income with progression, for the correct calculation of the tax rate. Pensions taxed only in Spain will be taxed at the IRPF rate that corresponds to the sum of your income. Spain allows the payment of IRPF to be split (into two installments, 60% in June and 40% in November) if the liquidation is payable. It is also possible that, if your pension is high and without withholding, you will have to make voluntary quarterly fractional payments so as not to accumulate the entire burden in June (consult with your advisor). Remember that, although treaties avoid double taxation, you must declare all your worldwide income in Spain; if you paid taxes abroad for any, you can apply the deduction for international double taxation in your Spanish tax liability.

Form 720: declaration of assets abroad. In addition to the IRPF, there is an informative obligation in Spain to declare assets abroad, which is relevant for many foreign retirees who move with assets. Form 720 is an annual informative form where tax residents must report certain assets or assets located outside of Spain, provided they exceed certain values. Specifically, there are three categories of assets to report: foreign bank accounts; securities, stocks, insurance, or income deposited or managed abroad; and real estate (properties) outside of Spain. You only have to declare a category if the total value of the assets in that category exceeds €50,000 as of December 31 (or if it reached that value at some point during the year). For example, if you keep a house in your country with a value of €120,000, or have bank accounts outside of Spain with combined balances of more than €50,000, you must file Form 720. The declaration is made only once, between January 1 and March 31 of the year after you became a resident or acquired the assets. It is only repeated in successive years if any of those previously declared assets increases in value by more than €20,000 or if you acquire new assets abroad above the threshold.

Form 720 has been famous for its strict sanctioning regime (very high fines for not declaring it or doing so incorrectly), although penalties have recently been adjusted after a ruling by the EU. However, it is still mandatory and it is crucial to file it correctly and on time to avoid problems. If you arrive in Spain with significant assets abroad, prioritize this procedure. An example: Susan moved to Spain in 2025; she owns a house in Florida and accounts in the U.S. with savings. When she becomes a tax resident in 2025, before March 2026 Susan must report her house (real estate category) and her accounts (bank accounts category) with their values as of 12/31/2025, provided they exceed €50,000. It does not entail paying additional taxes on those assets; it is only informative, but compliance is mandatory. Given the delicate nature of the matter, it is advisable to do it with the assistance of an expert or an International Tax Lawyer in Spain to ensure everything is reported correctly.

Local or other taxes. As a resident, you could also have other tax obligations in Spain: for example, if you acquire a home here, you will pay annual Property Tax (IBI) to the city council; if you buy a car, you will pay registration and road tax, etc. However, in this article we focus on the transnational income and asset issues that most affect foreign retirees: the IRPF income tax return and informative forms. Do not forget that Spain does not currently have a specific net wealth tax for residents (changes are being considered, but it varies by Autonomous Community), although some non-residents were subject to tax on assets in Spain. If you become a resident, you will stop paying non-resident tax on your Spanish house (if you had one) and instead that house will form part of your IRPF or your wealth base as appropriate. Again, good prior tax planning will help you anticipate these changes.

Double Taxation Treaties: How to Avoid Double Taxation of Foreign Retirement

What is a Double Taxation Treaty (DTA)? They are international treaties that Spain has signed with other countries to coordinate who taxes each type of income and ensure that taxes are not paid twice on the same income. These treaties (in English, Double Tax Agreements, DTA) establish attribution rules: for example, they can say "pensions are only taxed in the country of residence" or "public pensions are taxed in the country that pays them." They generally follow the OECD Model Treaty, so they have similar articles from country to country. In matters of pensions, as we saw, there is usually an article on private pensions and another on public pensions in each treaty. They also define mechanisms to eliminate double taxation when both countries have the right to tax: normally, the country of residence gives a tax credit for the tax paid abroad, or it exempts that income (sometimes with progression). General example: if, according to the treaty, a pension can be taxed by both country A (origin) and country B (residence), the treaty will oblige B to avoid double taxation by giving a deduction for the tax from A. In some cases, the treaty opts for exemption: the country of residence does not tax that income, but it takes it into account for the global calculation (exemption with progression). Each treaty is different, which is why it is vital to consult the specific text that applies to your case. Spain publishes all its treaties in the BOE and offers guides by country (the Tax Agency has informative brochures by country, as we saw with the U.S., UK, etc.). You can review the complete list of treaties on the official website of the Ministry of Finance (List of Double Taxation Treaties) where you will even find links to the BOE for each treaty.

Practical example of avoided double taxation: Suppose Alice, a tax resident in Spain, receives a private pension from Germany of €18,000 per year. Germany, initially, withheld 5% (€900) applying its internal regulations. According to the Spanish-German treaty, that pension can be taxed in both countries, but Spain (residence) has the responsibility of eliminating double taxation. How is this done? Alice will declare the €18,000 in her Spanish IRPF; the calculation of the Spanish tax may result in, say, €2,500 to pay. However, having paid €900 in Germany, Spain allows her to subtract that amount through the deduction for international double taxation (Art. 80 LIRPF). Thus, Alice would only pay the difference (€1,600) to the Spanish Tax Agency. The final result: on the €18,000 she pays a total of €2,500 in tax, but distributed between Germany and Spain, never exceeding the taxation that corresponds to that income. If, on the other hand, the pension were exclusively subject to Spain by treaty (e.g., a private UK pension), then Alice would not pay anything in Germany and would pay everything in Spain; or vice versa, if it were exclusive to the country of origin (e.g., a public UK pension), she would only pay in the UK and in Spain it would be exempt. We thus see that thanks to the treaty, paying double is avoided: one of the two countries gives up the tax or, if they share it, the resident receives a credit.

In practice, to avoid double taxation you must: 1) inform the foreign authority/payer that you are a tax resident of Spain (generally by providing a tax residence certificate issued by the Spanish Tax Agency, valid for one year), so that they apply the treaty and reduce/eliminate the withholding at source; 2) declare that income in Spain and indicate the foreign tax paid, to apply the deduction for double taxation if applicable. It is advisable to do this with advice, since each country has its own forms for requesting treaty benefits (for example, Form 673 for U.S. pensions, HMRC's Form DT-Individual for the UK, etc.). An International Tax Lawyer in Spain can help you manage these procedures with the bureaucracy of both countries.

Recommendations for Adequate Tax Planning for Your Retirement in Spain

Plan before moving. If you are considering retiring in Spain, make a list of your sources of income (pensions, investments) and your assets, and review the tax treatment they would have here. Consult the double taxation treaty applicable to your main pensions. You may discover, for example, that it is convenient for you to start receiving certain income after moving to take advantage of better tax conditions, or vice versa, to receive a single payment before leaving your country. Also consider the timing of the change of residence: as we mentioned, it can be fiscally advantageous to arrive in Spain at the beginning of the year to avoid being a resident in a year in which you have already had high income previously in another country (as you would bring them to the Spanish worldwide income). Likewise, ask yourself if you will keep properties or accounts in your country of origin; if so, prepare for the Form 720 obligation. You may also consider selling a property before moving if you do not want to deal with capital gains taxation here in the future. These are personal decisions, but a tax planner can optimize them. Empathy is key: we understand that these issues are complex, but good planning will save you money and scares.

Avoid common mistakes. A frequent mistake is not communicating your new tax residence. Remember to obtain the Spanish tax residence certificate (requested from the Tax Agency, Form 01, once you have an NIE and are registered) to give it to the paying entities of your pensions abroad. This prevents them from withholding taxes as if you were still a non-resident. Another oversight may be not registering with Hacienda: upon arrival, if you are going to start economic activities or simply to be registered, you must file Form 030 for change of tax address. Although as a pensioner you do not engage in an activity, it is good to be on the Hacienda census with your Spanish address. Also, keep all your foreign tax documentation (withholding certificates, treaty forms, pension receipts) in case the Spanish Tax Agency requests them to justify deductions for double taxation or exemptions.

Seek professional assistance. Tax legislation is complex and changes over time. The most sensible thing, especially at the beginning, is to rely on specialized advisors. An "International Tax Lawyer in Spain" can be your invaluable ally. This professional knows both Spanish regulations and the implications of international treaties, and usually coordinates with law firms in your country of origin if necessary. They can help you: develop a retirement tax strategy, correctly fill out and file your IRPF declaration, manage Form 720, request residence certificates, apply treaty benefits (for example, request the refund of undue withholdings at source), and even represent your interests before Hacienda in case of requirements or inspections. Having someone you trust who speaks your tax language will give you peace of mind. Remember that with age we sometimes feel less inclined to deal with complex paperwork - you are not alone in this, there are professionals to ease the burden. To mention again: an International Tax Lawyer in Spain can make the difference between a quiet retirement experience or a tax headache.

Stay informed and take advantage of legal benefits. Spain offers some tax advantages that you may be able to take advantage of. For example, certain autonomous communities have deductions for seniors or pensioners, or more favorable deductions for double taxation on foreign employment income. Find out each year about the news of the tax campaign (the Tax Agency publishes an annual manual). If you have income from renting a home in your country of origin, see if the treaty taxes it only there or here and plan accordingly. Another point: if you come from the EU, check health care - EU retirees usually bring Form S1 to transfer their medical care to Spain. This is not fiscal, but it is linked to quality of life in your retirement. A good comprehensive advisor can also guide you on these collateral issues.

Conclusion: Retiring in Spain is a dream for many, and with good reason: quality of life, climate, culture. With a little tax planning, you can enjoy that dream without tax nightmares. We have tried to explain in a simple way the key aspects: when you are a tax resident, how your international pensions are taxed, what to declare each year, and how treaties avoid double taxation. It may seem overwhelming at first, but you are not obligated to navigate it alone. Rely on professionals and official sources to make informed decisions. The Spanish Tax Agency offers information on its website (for example, the guide "Obtaining pensions from another country") and the authorities of your own country can advise you on how to export your pension. Be proactive: gather your documents, ask all your questions, and take the step with confidence. Spain welcomes you, and with the right guidance on tax matters, you can dedicate your time to what is most important: enjoying your retirement under the Spanish sun. Welcome! 👵🏻🧓🏻☀️