Are Pensions Taxed in Spain? What Retirees Need to Know

Most state and private pensions can be paid straight into a Spanish bank account, so you don’t need to move a pension to retire in Spain. What changes is who taxes it.

Getting paid in Spain

List every pension you have, including state, workplace and private pensions and any annuities. Tell each provider your Spanish address and the date you became resident, and ask to be paid in euros if possible, to avoid conversion fees on every payment. UK State Pensions are increased each year for people living in Spain, and some providers ask for a proof-of-life certificate each year.

Who taxes it?

Once you’re tax resident in Spain, Spain usually taxes your pensions. Tax treaties set exceptions, such as UK government service pensions, which stay taxed in the UK. Claim treaty relief so tax isn’t also deducted at home on pensions Spain will tax, and declare your pensions in your Spanish Renta every year.

Lump sums and transfers

Lump sums can be taxable in Spain even if they’re tax-free at home. Overseas pension transfers can carry large charges and are a common target for scams, so get regulated advice before you transfer or cash in anything.

Sort every pension with our moving your pension to Spain checklist.