Retiring to Fuerteventura: how your UK, German or Dutch pension is taxed in Spain

The first Spanish tax return of a retired couple in Fuerteventura is where two countries' systems meet, and where most of the surprises live. A German engineer finds that his statutory pension is now taxed in both countries and needs a credit; a British former civil servant learns that her pension stays taxed in the UK but still sets the rate on everything else she earns here; a Dutch couple discover that nobody withheld anything on their pensions all year, so the whole bill falls due in June. None of that is a mistake by anyone. It is how residence-based taxation and the treaties Spain has signed divide a pension between the country that pays it and the country you live in. This piece sets out the rules as they stand in September 2026: what Spanish income tax does with a foreign pension, what each treaty says for the countries our clients come from, the filing thresholds that catch pensioners with no withholding, the reporting duties on foreign pension pots, and the Social Security side — claiming a pension earned abroad and the health cover that comes with it. Quotations are in Spanish with the reading in English.

The starting point: resident, so taxed on the world

Everything below assumes you are tax resident in Spain — 183 days in the calendar year, or your centre of economic interests here, as we set out in our piece on the 183-day rule. A resident is taxed by Spain on worldwide income, and the tax agency's own guidance for pensioners says so in one sentence: «Si una persona física es residente fiscal en España debe tributar en España por su renta mundial, es decir, debe declarar en España las rentas que obtenga en cualquier parte del mundo, sin perjuicio de lo que se disponga en el Convenio para evitar la doble imposición» — a tax resident of Spain is taxed on worldwide income and must declare income obtained anywhere in the world, subject to what the applicable double-taxation treaty provides.

Under the income-tax law a pension is employment income — «rendimientos del trabajo» — whoever pays it. Article 17.2.a of the Ley 35/2006 lists «las pensiones y haberes pasivos percibidos de los regímenes públicos de la Seguridad Social y clases pasivas y demás prestaciones públicas por situaciones de incapacidad, jubilación, accidente, enfermedad, viudedad, o similares» — pensions from public social-security schemes and other public benefits for disability, retirement, sickness or widowhood — and, separately, benefits from pension plans, including those governed by the EU occupational-pensions directive. A foreign state pension, an occupational pension and a private annuity all land in the same general base, taxed at the progressive scale, next to a Spanish salary or a Spanish pension if you have one.

Two things soften it. Employment income carries a reduction for lower incomes — 7,302 euros a year for net employment income up to 14,852 euros, tapering to nothing at 19,747.50 euros, provided other income does not exceed 6,500 euros (art. 20) — and the personal allowance rises with age: 5,550 euros for everyone, 6,700 euros over 65 and 8,100 euros over 75 (art. 57). Lump sums are the exception to be careful with: a capital sum drawn from a foreign pension plan is taxed in the year it arrives, and the 30 % reduction for income built up over more than two years does not apply to pension-plan and social-security benefits at all (art. 18.2 excludes the whole of article 17.2.a). A pension pot cashed in one go after moving here is, in most cases, the most expensive way to bring it to Spain.

Which country taxes what: the treaty logic

Spain's treaties follow the OECD model, and the tax agency's page for foreign pensioners explains the pattern: two articles, one for pensions from private employment and one for pensions paid by a state for public service. The first almost always gives the taxing right to the country of residence; the second to the country that pays, unless the pensioner is a national of the country of residence. Where both countries may tax, the residence country — Spain — relieves the double taxation, by a credit for the foreign tax (art. 80 of the income-tax law: the lower of the tax paid abroad and the Spanish tax on that income) or, where the treaty exempts the income, by exempting it «con progresividad»: the exempt pension is not taxed here, but it is added to your other income to set the rate that income pays. A pension from a country with no treaty is simply taxed here, with the article 80 credit for whatever the source country took.

The table below is what the treaties say for the countries our clients come from, read in the texts published in the Boletín Oficial del Estado. «State pension» means the public old-age pension of a social-security system; «government-service pension» means a pension paid by a state or its subdivisions for services rendered to them — civil servants, teachers in state employment, the armed forces, the police.

• United Kingdom (treaty of 14 March 2013). Private and occupational pensions and the UK state pension: taxable only in Spain (art. 17). Government-service pensions: taxable only in the UK (art. 18.2), but exempt with progression here — unless you are a Spanish national, in which case only Spain taxes them. Spain relieves by credit where both may tax (art. 22). In practice the UK stops taxing a private pension at source once HMRC receives its form DT-Spain Individual with a certificate of residence for treaty purposes issued by the Spanish tax agency.
• Germany (treaty of 3 February 2011). Private pensions: taxable only in Spain (art. 17.1). Payments under the German social-insurance legislation — the statutory pension — «pueden someterse a imposición también en ese Estado» — may also be taxed in Germany — when the entitlement arose after 31 December 2014, with the German tax capped at 5 % of the gross payment for entitlements arising between 2015 and 2029 and at 10 % from 2030 (art. 17.2); the same regime reaches other payments built on tax-favoured contributions over more than twelve years (art. 17.3). Spain then grants a credit for the German tax up to that cap (art. 22.1.a). Government-service pensions: only Germany, exempt with progression here, unless you are a Spanish national (art. 18.2).
• Netherlands (treaty of 16 June 1971). Pensions for past employment: taxable only in Spain (art. 19), and the AOW state pension ends in the same place, whether read under that article or under the treaty's clause for income not mentioned elsewhere (art. 23). Pensions paid by the Dutch state or its subdivisions for public service «pueden someterse a imposición en este Estado» — may be taxed in the Netherlands (art. 20.1) — and Spain exempts them with progression (art. 25.3).
• Italy (treaty of 8 September 1977). Private pensions, INPS included: only Spain (art. 18). Public-service pensions: only Italy (art. 19.2.a), exempt with progression here, unless the recipient is a Spanish national, in which case only Spain (art. 19.2.b).
• France (treaty of 10 October 1995). Private pensions and the social-security pensions: only Spain (art. 18). Public-service pensions: only France, exempt with progression here, unless you hold Spanish nationality without also holding French nationality (art. 19.2).
• Portugal (treaty of 26 October 1993). Private pensions: only Spain (art. 18). Public-service pensions: only Portugal, exempt with progression here, unless you are a Spanish national (art. 19.2).
• Belgium (treaty of 14 June 1995). Pensions, life annuities and similar remuneration for past employment: only Spain (art. 18). Public-service pensions: only Belgium (art. 19.2.a), unless the recipient is a resident and national of Spain (art. 19.2.b); Spain relieves by credit and, for exempt income, keeps the progression (art. 23).
• Ireland (treaty of 10 February 1994). Pensions and annuities: only Spain (art. 18). Public-service pensions: only Ireland (art. 19.2.a), unless the recipient is a resident and national of Spain (art. 19.2.b); credit method in Spain (art. 23).

Three cautions on the table. The «government-service» box is narrower than people think: a pension for work in a state-owned business is treated as a private pension under every one of these treaties, and a state pension paid to everybody under a social-security system is never «government service». Nationality changes the answer for public-service pensions, so a retired British teacher who has taken Spanish nationality moves from the UK box to the Spanish one. And the treaties allocate the right to tax; they do not decide how the source country exercises it — the UK, Germany or the Netherlands may go on withholding until you show them you are resident here, which is why the certificate of fiscal residence for treaty purposes is the first document to request from the Spanish tax agency after your first year.

Declaring it: the thresholds that catch pensioners, and the June bill

A Spanish employer or Spanish pension payer withholds tax every month; a foreign pension fund does not, because only persons and entities operating in Spain are obliged to withhold (income-tax regulation, art. 76). The tax agency's page for foreign pensioners draws the consequence: «el pagador no residente de una pensión extranjera no es un obligado a retener a cuenta del IRPF, por lo que el límite de rentas a partir del que se inicia la obligación de declarar es más bajo que respecto de otros rendimientos del trabajo» — a non-resident payer of a foreign pension is not obliged to withhold, so the income limit above which you must file is lower than for other employment income.

The numbers, in the text of article 96 in force in September 2026: employment income up to 22,000 euros a year needs no return, but the limit drops to 15,876 euros «cuando el pagador de los rendimientos del trabajo no esté obligado a retener» — when the payer is not obliged to withhold (art. 96.3.c) — and equally when the income comes from more than one payer and the second and further payers exceed 1,500 euros between them (art. 96.3.a). A single foreign pension of 16,000 euros therefore obliges you to file; a Spanish pension of 14,000 euros plus a foreign one of 3,000 euros obliges you to file too. Exempt income is left out of the count. And whoever claims the foreign-tax credit must file whatever the amount (art. 96.4, and art. 61.1 of the regulation).

The June bill follows from the same fact. With nothing withheld during the year, the whole tax on the foreign pension is due with the return, between April and the end of June. The law allows the amount to be split without interest: 60 % on filing and 40 % in early November (regulation, art. 62.2). A pensioner who also has a Spanish pension can ask its payer, in writing, to apply a higher withholding rate than the standard one, and the payer must comply (art. 88.5) — a simple way to spread the foreign pension's tax over the year instead of finding it in June.

Two more mechanics. The foreign-tax credit is claimed in the return itself, with the foreign tax certificate kept for the day the agency asks: the deduction is the lower of the tax actually paid abroad and the Spanish average rate applied to the foreign income (art. 80). And the tax agency does not depend on your memory: since 2015 the EU's administrative-cooperation directive lists «pensions» among the categories of income that member states exchange automatically (Directive 2011/16/EU, art. 8.1), so the German, Dutch or Italian pension you receive is already in the agency's data when it opens your return.

Disability pensions, and what the exemption reaches

Article 7.f exempts «las prestaciones reconocidas al contribuyente por la Seguridad Social o por las entidades que la sustituyan como consecuencia de incapacidad permanente absoluta o gran invalidez» — benefits granted by Social Security, or by the bodies that stand in for it, for absolute permanent incapacity or great invalidity. The tax directorate has said repeatedly that a disability pension paid from abroad can fall inside that exemption, on two conditions: that the degree of incapacity recognised there is equivalent to Spain's absolute permanent incapacity or great invalidity, and that the paying body has, under its own country's rules, the character of a substitute for social security. Both are for the pensioner to prove, by any admissible evidence, before the tax agency's assessment or inspection offices. A partial or ordinary disability pension from another country is taxed as any other pension; an absolute one may be exempt, but only with the file to show it, and an equivalence report from the Spanish social-security medical board is the evidence the offices usually accept.

Pension pots abroad: the reporting duties

Foreign pension rights are not, as such, on the list of assets reported in the Modelo 720, the annual information return on assets held abroad. The tax agency's own answer is precise: «No existe obligación de información sobre los planes de pensiones (de las aportaciones a los mismos) en tanto no se produzca la incidencia que da lugar al cobro de la pensión en modo de renta temporal o vitalicia» — there is no reporting obligation for pension plans while the contingency that triggers payment as a temporary or life annuity has not occurred. Two exceptions follow in the same answer: a foreign plan that lets you surrender it like a life-insurance policy is reported for its surrender value, and once the contingency has occurred — retirement, death, incapacity — the beneficiary reports the rights that remain, at their surrender value or as an annuity, if they still hold them at 31 December and the category exceeds the 50,000-euro threshold. Foreign bank accounts, securities and property have their own boxes in the same return. Since the Court of Justice of the European Union's judgment of 27 January 2022 and the law of 9 March 2022 that followed it, a late or incomplete 720 carries the general tax-law penalties only, not the former fixed fines and the imprescriptible income imputation.

Wealth tax is a different return and a different set of rules; the Canary Islands' position for 2026 and the treatment of pension rights are covered by our colleagues at Olga Caballero in their piece on wealth tax for non-residents and new residents, and we do not repeat them here.

Claiming the pension itself, and the doctor

Tax is only half of the move. If you worked in more than one EU or EEA state, in Switzerland or in the United Kingdom, the Spanish social-security institute is the place to claim: Regulation 883/2004 makes the institution of your country of residence the contact point for all the periods of insurance you have anywhere, each country aggregates the periods to open the right and pays its own pro-rata share (arts. 6 and 52), and the United Kingdom stays inside that coordination through the Withdrawal Agreement and the social-security protocol of the Trade and Cooperation Agreement. Each country pays its pension separately, at its own age, under its own rules; Spain does not top up a foreign pension, and the minimum-pension supplement on a Spanish pension is reduced by the foreign pensions the retiree also receives (Ley General de la Seguridad Social, art. 59).

Health care follows the pension. A pensioner of another EU or EEA state, of Switzerland or of the United Kingdom who does not also draw a Spanish pension asks the institution that pays their pension for the S1 form, registers it with the INSS office of their place of residence, and then applies to the Canary health service for the card; the cost is borne by the pension state. A retiree who moves here with no pension yet — under a non-lucrative visa, for instance, which our colleagues at Olga Caballero describe in their piece on the non-lucrative visa — arrives on private insurance until a residence-based right or the special agreement with the public system applies.

The first year, in order

• Before you move: ask each pension payer what it withholds for non-residents and which form stops it; find out whether any pension is a government-service pension; take advice before drawing any lump sum.
• On arrival: padrón and residence, the NIE and tax identification, a Spanish bank account; the S1 registered with the INSS if you are a pensioner of another state.
• After the first calendar year of residence: the certificate of fiscal residence for treaty purposes from the tax agency, sent to HMRC on form DT-Spain Individual, to the German pension office or to the Dutch payer so that the source country stops withholding what the treaty gives to Spain.
• April to June: the income-tax return with every pension declared — taxed, credited or exempt with progression as its treaty box says — and the 60/40 split if the bill is large; from the second year, a higher withholding on any Spanish pension to spread it.
• January to March: the Modelo 720 if foreign accounts, securities, property or a pension in payment cross the thresholds; the wealth-tax return where it applies.
• Every year: keep the foreign tax certificates, the pension statements and the treaty forms; the tax agency's letters arrive electronically, and the ten-day rule we describe in our piece on electronic notifications applies to a pensioner as much as to a company. The autumn tax calendar has the dates.

We prepare the return with the treaty applied pension by pension, the credits and the exempt-with-progression lines in their boxes, the 720 where it is due, and the certificates of residence and treaty forms for the source countries; the tax advisory page describes the service and a first meeting is booked online.

Common questions

My UK state pension and my company pension are paid without UK tax. Do I still declare them in Spain?

Yes, both. Under article 17 of the 2013 treaty they are taxable only in Spain, so they go into your Spanish return as employment income at the progressive scale; the UK not taxing them is the treaty working, not an exemption here. Only a pension for government service — civil service, armed forces, police, state teaching — stays taxed in the UK, and even that one is declared in Spain as exempt income with progression unless you are a Spanish national.

Germany taxes my statutory pension. Do I pay twice?

Not twice in full. Since the 2011 treaty Germany may tax payments under its social-insurance legislation when the entitlement arose after 2014, capped at 5 % of the gross pension until entitlements arising in 2029 and 10 % from 2030; Spain taxes the pension too and gives you a credit for the German tax up to that cap. A German private or occupational pension is taxable only in Spain; a German civil-service pension only in Germany, exempt with progression here.

Nobody withholds tax on my pension. When and how do I pay?

With the annual return, between April and the end of June of the following year, because a foreign payer is not obliged to withhold Spanish tax. That is also why the filing threshold is 15,876 euros instead of 22,000 for a pension paid from abroad. You can split the amount 60 % on filing and 40 % in November without interest, and if you also draw a Spanish pension you can ask its payer in writing for a higher withholding rate to cover the difference during the year.

Do I have to report my foreign pension fund on the Modelo 720?

Not while it is still building up and cannot be surrendered: pension rights are not on the list of reportable assets until the contingency occurs. Once you are drawing it, you report the rights that remain — at surrender value, or as an annuity — if they exceed the threshold at 31 December, and a plan you could cash in like a life-insurance policy is reported from the start. Accounts, securities and property abroad are reported on their own thresholds, and since 2022 a late return carries only the ordinary penalties.

Facts verified in September 2026 (Personal Income Tax Act, Ley 35/2006, articles 7.f, 17, 18, 20, 57, 80 and 96 in the text in force; its regulation, Real Decreto 439/2007, articles 61, 62, 76 and 88; the double-taxation treaties with the United Kingdom, Germany, the Netherlands, Italy, France, Portugal, Belgium and Ireland as published in the Boletín Oficial del Estado; the tax agency's guidance on pensions from another country, its country leaflets and its Modelo 720 questions; Directive 2011/16/EU, article 8; Regulation (EC) 883/2004; General Social Security Act, article 59). Thresholds and allowances are those of the law in force at publication and change with each year's budget; your treaty box depends on the exact payer of your pension and on your nationality, which is why every case is read against its own documents.