Spain tax for expats: worldwide income, Beckham Law, and brackets.
Spend 183+ days a year in Spain and you're a Spanish tax resident — and if you hold a non-lucrative visa, the renewal rules now force that. Here's what that means for your pension and retirement income in 2026 — whether you're coming from the US, Canada, the UK, or Australia.
Last verified: 8 July 2026
When you become a Spanish tax resident
You're resident for a tax year if you spend more than 183 days in Spain during the calendar year (sporadic absences count as days in Spain unless you prove tax residence elsewhere with a certificate), or if your centre of economic interests is in Spain. There's a rebuttable presumption if your spouse and minor children live here. Residents are taxed on worldwide income for the whole year — Spain has no split-year treatment, so the timing of your move matters. Note the trap: the non-lucrative visa's renewal rule requires 183+ days of real residence, so every NLV holder is a tax resident by design.
The 2026 rates
No 2026 budget passed, so the prior scales roll over. General income (pensions included) is taxed on a progressive scale set half by the state, half by your region — combined rates run roughly 19% to 47% where regions mirror the reference scale, with real top rates ranging about 43–54% by region (Madrid at the low end; Valencia and Catalonia at the high end). Savings income (interest, dividends, capital gains) has its own national scale:
Savings income band (2026)
Rate
Up to €6,000
19%
€6,000 – €50,000
21%
€50,000 – €200,000
23%
€200,000 – €300,000
27%
Above €300,000
30% (raised from 28% in 2025)
Region matters. Half of the general scale is set by your comunidad autónoma, so the same pension is taxed differently in Madrid than in Valencia. Exact combined tables sit in each region's own law — treat any single "Spain tax rate" figure with suspicion.
Your pension & retirement income
How Spain taxes the money you've already earned.
Spain taxes foreign pension income as general income (renta general) at progressive IRPF rates — roughly 19% to 47%, with regional variation on top. But the treaty with your home country determines who taxes what, and the answer differs for every combination. Pick where your pension comes from.
Where is your pension from?
Key numbers · US pension in Spain · 2026
Treaty: US–Spain Convention (1990), 2019 Protocol · full text (IRS)
Social Security: both countries may tax — but AEAT says citizenship-based US tax does not generate a Spanish credit
401(k) / Traditional IRA: taxable only in Spain under Art. 20(1)(a), but the saving clause means the US taxes its citizens too; relief via FTC on the US side
Government & military pensions: taxable only in the US (Art. 21) — exempt in Spain with progression
Roth IRA: grey area — Spain does not recognise the tax-free wrapper (Consulta V1291-22 confirmed internal gains are taxable)
FEIE does not apply to pension income — only the Foreign Tax Credit works here
Social Security
Under Article 20(1)(b) of the US–Spain treaty, Social Security benefits "may be taxed" in the paying state. That wording grants the US the right to tax — but it does not prohibit Spain from also taxing as worldwide income of a resident. Both countries can tax the same income.
Here's the sting: AEAT's official position (in their folleto for US-income residents, updated April 2026) is that US tax levied purely on a citizenship basis does not entitle the resident to the deducción por doble imposición internacional (Art. 80 LIRPF). Since the US taxes its citizens' Social Security because they are citizens — not because the income is US-sourced to a non-citizen — AEAT will not grant a Spanish credit. Double taxation must be relieved on the US side via the Foreign Tax Credit (Form 1116).
In practice, the IRS applies withholding on 85% of benefits for nonresident aliens. If your Spanish IRPF on the same income exceeds the US withholding, you owe the difference to Spain. The FTC on Form 1116 is the only relief mechanism.
401(k) and Traditional IRA withdrawals
Article 20(1)(a) says private pensions "shall be taxable only" in the state of residence — Spain. But Article 20(1)(a) is not among the saving clause exceptions, which means the US retains the right to tax its citizens on these withdrawals regardless. The practical result: Spain taxes the full withdrawal as renta general at progressive IRPF rates, the US also taxes it, and you claim a Foreign Tax Credit on the US side.
AEAT's position is consistent: since the treaty grants Spain exclusive taxing rights and the US is only taxing under the saving clause (citizenship), the burden of eliminating double taxation falls entirely on the US via FTC. Spain will not grant a credit under Art. 80 LIRPF.
Spain does not classify a 401(k) as a plan de pensiones under Spanish pension legislation. It is treated as ordinary general income (rendimientos del trabajo) — no special pension reduction applies.
Roth IRA and Roth 401(k) — the grey area
This is genuinely unsettled. Spain has no equivalent to the Roth structure. The US considers qualified Roth withdrawals tax-free; Spain does not recognise that status. Consulta Vinculante V1291-22 (June 2022) confirmed that investment gains within a Roth IRA are subject to Spanish income tax.
Spain will treat Roth withdrawals as taxable income. The exact classification — savings income (renta del ahorro, 19–30%) versus general income (renta general, 19–47%) — remains debated among practitioners. Because the US does not tax qualified Roth withdrawals, there is no Foreign Tax Credit available to offset the Spanish tax. The Roth's tax-free benefit is effectively lost upon becoming a Spanish tax resident.
Roth IRAs must also be declared on Modelo 720 (if above thresholds) and are subject to Spanish wealth tax (Impuesto sobre el Patrimonio).
The timing play: complete Roth conversions before establishing Spanish tax residency. While you're still US-only tax resident, conversions are taxed at US rates and future qualified withdrawals remain tax-free in the US. Once you're Spanish tax resident, all bets are off.
Government and military pensions
Article 21(2) gives the US exclusive taxing rights on government pensions — FERS, CSRS, military retirement pay, and state/local government pensions. Spain cannot tax them. You still declare them on your Spanish IRPF return, but with the treaty exemption noted. Spain uses the exempt income to calculate your marginal rate on other income (exención con progresividad).
Exception: if you hold both US and Spanish nationality (but are not also a US citizen), the government pension exclusion may not apply.
Private employer pensions (DB and DC)
Same treatment as 401(k)/IRA under Article 20(1)(a): taxable only in Spain in principle, but the saving clause means the US taxes its citizens too. FTC resolves the overlap on the US side. Spain taxes the full amount as renta general at progressive IRPF rates.
US state taxes — the exit matters
Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you're already in one of these, there's no state-level complication.
The "sticky states" to watch are California and New York. California's Franchise Tax Board actively audits expats and challenges residency changes years after the fact — maintaining a CA driver's license, bank account, or property can trigger continued jurisdiction. New York focuses on your "intent to return" and whether you keep a permanent place of abode. Clean your ties before you leave.
Federal protection under 4 U.S.C. §114 generally prohibits states from taxing retirement income of former residents, but not all income types are covered. If you're leaving a high-tax state, get state-specific exit advice.
What you still owe the US — the full picture
Obligation
Detail
Annual filing
Yes — forever. The US taxes citizens on worldwide income wherever they live. Form 1040 required annually.
FEIE
US $132,900 for 2026 — but does not apply to pension income. Only earned income qualifies.
Foreign Tax Credit
Form 1116. Spanish tax paid credits against US tax on the same income. The primary relief mechanism for retirees.
FBAR
FinCEN Form 114 if foreign accounts exceed US $10,000 aggregate at any point. Due April 15 (auto-extension to Oct 15).
FATCA
Form 8938 if foreign assets exceed US $200,000 year-end (single, living abroad) or US $300,000 at any point. MFJ: US $400k/US $600k.
Totalization
US–Spain agreement since 1988 (new agreement signed 2024, pending ratification). Prevents double social security contributions; allows combining coverage periods.
Treaty: Canada–Spain Convention (1976), 2015 Protocol · full text
Canadian withholding on periodic pensions: treaty cap of 15% (Art. XVIII)
RRSP lump-sum withdrawals: 25% flat Part XIII withholding — no treaty reduction
RRIF minimum withdrawals: exempt from Canadian withholding; amounts above the minimum at 15%
TFSA: Spain does not recognise the tax-free wrapper — all income inside is taxable in Spain
Departure tax: deemed disposition of most assets on leaving Canada
CPP / QPP
Under Article XVIII of the Canada–Spain treaty, Canada may withhold on periodic pension payments, but the rate is capped at 15%. To claim the reduced rate, file Form NR301 with CRA and provide a Spanish certificado de residencia fiscal. Without the form, Canada withholds at the default 25%.
Spain taxes the full CPP/QPP amount as renta general at progressive IRPF rates (19–47%+). You claim a credit for any Canadian tax withheld under Spain's deducción por doble imposición internacional (Art. 80 LIRPF).
OAS (Old Age Security)
Same treaty treatment as CPP — periodic payments subject to the 15% treaty cap. But watch the OAS clawback: if your worldwide net income exceeds CAD $95,323 (2026 threshold), OAS begins to be clawed back at 15% of every dollar above. Full clawback at about CAD $152,000 (ages 65–74) or CAD $158,000 (75+). Non-residents must file the OASRI (Old Age Security Return of Income) annually.
OAS eligibility abroad requires 20+ years of Canadian residence after age 18 for indefinite portability. The Canada–Spain social security agreement allows totalization of residence periods.
GIS is lost. The Guaranteed Income Supplement stops after 6 months outside Canada. No treaty or agreement overrides this. It can be reinstated if you return.
RRSP / RRIF withdrawals
Canada withholds 25% on RRSP lump-sum withdrawals from non-residents — and the treaty does not reduce this rate for lump sums. For RRIF periodic withdrawals, the treaty cap of 15% applies to amounts above the minimum; the RRIF minimum withdrawal is exempt from Part XIII withholding entirely.
Strategy: convert your RRSP to a RRIF before emigrating. This enables periodic withdrawals at the reduced 15% treaty rate instead of the 25% flat rate on RRSP lump sums. The difference is significant on large balances.
Section 217 election: non-residents can elect to file a Canadian return and be taxed at graduated rates rather than flat Part XIII withholding. If your worldwide income is low, the marginal rate may be below 25%, producing a refund. File Form NR5 in advance for reduced withholding during the year. Filing deadline: June 30. Most beneficial in low-income transition years.
Spain taxes the full withdrawal as renta general at progressive IRPF rates. Credit for Canadian withholding applies. Whether Spain can tax unrealised annual growth inside an RRSP — since Spain does not recognise the tax-deferred wrapper — is a disputed area requiring specialist advice.
LIRA / LIF
Treatment mirrors RRSP/RRIF: LIRAs attract 25% non-resident withholding (like RRSPs), while LIF periodic payments qualify for the treaty-reduced 15% rate (like RRIFs). Some provinces allow non-residents to unlock LIRAs entirely, triggering a lump-sum withdrawal at 25%. LIRAs and LIFs are excluded from departure tax.
Employer DB pensions — government vs private
The Canada–Spain treaty draws a critical distinction. Under Article XIX, pensions paid by Canada (or a province/territory/municipality) for services rendered as a public servant are taxable exclusively in Canada. Spain exempts them but uses the amount for rate calculation (exención con progresividad). This covers federal public service pensions (PSPP), RCMP, Canadian Forces, and provincial/municipal government pensions.
Private employer DB pensions fall under Article XVIII: Canada may withhold at the 15% treaty rate, and Spain taxes at progressive IRPF rates with credit for the Canadian withholding.
Exception: if the recipient is a Spanish national (and not also Canadian), the government pension exclusion may not apply.
TFSA — Spain doesn't recognise it
The TFSA's tax-free status is a purely Canadian construct. Spain treats the TFSA as a regular investment account. Dividends, interest, and capital gains inside the TFSA are taxable in Spain as renta del ahorro at 19–30%. Canada doesn't tax TFSA income, so there's no Foreign Tax Credit available to offset the Spanish tax.
You can't make new TFSA contributions as a non-resident (1% per month penalty). Withdrawals are tax-free in Canada even as a non-resident. But Spain taxes the income as it accrues — not just on withdrawal. Widely recommended: liquidate the TFSA before becoming Spanish tax resident.
Departure tax — the hidden bill
Under Section 128.1(4) of the Income Tax Act, when you cease Canadian residency you are deemed to have disposed of all property at fair market value. Capital gains are taxable in Canada.
If total FMV of all properties exceeds CAD $25,000, you must file Form T1161. You can elect to defer the tax via Form T1244, but security may be required and interest accrues.
Social security agreement
Canada and Spain have had a social security agreement since 1988 (protocol 1997). It covers CPP/QPP and OAS, allows totalization of contribution periods between countries, and ensures benefits are portable. Spanish contribution periods count toward OAS eligibility — but you still need a minimum of 20 years of Canadian residence for portability. The agreement does not cover healthcare.
Treaty: 2013 UK–Spain Convention, in force since June 2014 · replaces the 1975 treaty
UK State Pension: taxable only in Spain (Art. 17) — paid gross by DWP, no NT code needed
State Pension uprating: yes — annual increases (triple lock) protected for Spain under the UK-EU TCA
Workplace & SIPP pensions: taxable only in Spain (Art. 17) — apply for NT code to stop UK withholding
Civil service, military, police pensions: taxable only in the UK (Art. 18)
25% tax-free lump sum (PCLS): Spain does not recognise it — take it before becoming Spanish tax resident
UK State Pension
Under Article 17 of the UK–Spain treaty, the UK State Pension is taxable only in Spain. The UK has no taxing right. DWP already pays the State Pension gross (no UK withholding), so no NT code is needed for it.
For 2025/26, the full new State Pension is £230.25 per week (£11,973/year). Annual uprating under the triple lock is protected for UK pensioners in Spain — both under the UK-EU Withdrawal Agreement (for those resident before 1 January 2021) and the UK-EU Trade and Cooperation Agreement (for those who moved after). Spain is not a "frozen rate" country. This is a major advantage over countries like Australia, Canada, and New Zealand, where the UK State Pension is frozen at the rate when you left.
Spain taxes the full amount as renta general at progressive IRPF rates. Personal allowances for those aged 65+ (€6,700) and 75+ (€8,100) apply.
Workplace pensions (DB and DC)
Article 17: taxable only in Spain. Applies to both defined benefit (final salary/career average) and defined contribution schemes. Apply for the NT code to receive payments gross from your UK pension provider.
SIPP and personal pension drawdown
Article 17 again: SIPP drawdown payments are "pensions and other similar remuneration" — taxable only in Spain at progressive IRPF rates. The NT code process is the same as for workplace pensions.
SIPP balances may trigger Modelo 720 foreign asset reporting (threshold: €50,000 per category) and may be subject to Spanish wealth tax (Impuesto sobre el Patrimonio).
The 25% tax-free lump sum (PCLS) — take it before you move
Spain does not recognise the UK's 25% tax-free treatment. If you take the Pension Commencement Lump Sum while Spanish tax resident, the entire amount is taxable as renta general at progressive IRPF rates. On a £250,000 pot, the PCLS of £62,500 could face Spanish tax of £15,000–£28,000 depending on your other income and region.
Pre-2007 partial relief: Spain allows a 40% tax reduction on the portion of any lump sum attributable to contributions made before 1 January 2007. This is a one-time reduction. Contributions from 2007 onwards get no reduction.
While you're still UK tax resident, the PCLS is genuinely tax-free — no UK tax, no Spanish tax (you're not resident yet). Spain has no split-year treatment: if you exceed 183 days in Spain during a calendar year, you are resident for the entire year backdated to 1 January. Plan the timing accordingly.
NHS pensions — not what you'd expect
Despite being a public-sector pension, most NHS pensions are not classified as government service pensions under the treaty. Article 18 (government service) applies only to pensions paid directly by a government body in its administrative capacity. NHS pensions paid by NHSBSA, Capita, or SPPA fall under Article 17 — taxable only in Spain.
The rare exception: NHS pensions where the employer was a Local Authority (not an NHS Trust) fall under Article 18 and are taxable only in the UK.
Government pensions — civil service, military, police
Pension type
Taxed in
Civil Service (Alpha, Classic, Premium, Nuvos)
UK only (Art. 18)
Armed Forces Pension Scheme
UK only (Art. 18)
Police and Fire pensions
UK only (Art. 18)
Teachers' Pension (state school, local authority)
UK only (Art. 18)
NHS (most — NHSBSA/Capita/SPPA)
Spain only (Art. 17)
Local government (LGPS)
UK only (Art. 18)
If you hold dual UK-Spanish nationality, the government pension exclusion may not apply — the pension may become taxable in Spain, with credit relief.
Government pensions exempt from Spanish tax are still declared on the IRPF return. Spain uses the exempt income for rate calculation (exención con progresividad).
Getting the NT code — step by step
To stop HMRC deducting tax from your occupational or SIPP pension at source, you need an NT (No Tax) code. The process:
Confirm UK non-residence (file form P85 if not already done)
Ensure an active PAYE record exists with your pension provider (a small initial payment may be needed first)
Download and complete Form Spain-Individual from GOV.UK
Obtain a Certificado de Residencia Fiscal from the Agencia Tributaria, or get the form certified by your Delegación de Hacienda
Submit both to HMRC (Pay As You Earn and Self Assessment, BX9 1AS)
Allow 12–16 weeks for processing (complex cases up to 6 months)
Once issued, your pension provider pays gross — no UK tax deducted
Until the NT code is in place, HMRC will deduct tax at the default rate. You can reclaim the overpayment through your UK Self Assessment return or by writing to HMRC. The form includes a section for reclaiming overpaid tax going back up to 4 tax years.
Voluntary National Insurance — the 2026 change
From 6 April 2026, Class 2 voluntary NI contributions for people living abroad are permanently closed. Only Class 3 is available: £18.40/week (£957/year) — roughly 5x the old Class 2 rate. You also need either 10 continuous years of UK residence or 10 qualifying NI years to be eligible (previously only 3 years required).
Each qualifying NI year adds about 1/35th to your State Pension entitlement. At £957/year in contributions, the payback period is under 3 years. For most people with gaps, it's still worth it — but it's much more expensive than it was.
Healthcare — the S1 form
UK State Pension recipients can get an S1 form from NHSBSA, which transfers healthcare cost responsibility from the UK to Spain. Register the S1 with the local INSS (Instituto Nacional de la Seguridad Social) office and you can access Spain's public healthcare system. Allow 4–12 weeks for NHSBSA to issue the S1. The UK Global Health Insurance Card (GHIC) covers emergency treatment during temporary visits back to the UK.
S1 eligibility requires actually receiving a UK State Pension or other qualifying exportable benefit. Early retirees on private pensions who have not yet reached State Pension age do not qualify.
Treaty: Australia–Spain Convention (1992), in force since December 1992 · MLI-modified from 2023 (pension articles unchanged)
Age Pension: exportable to Spain — social security agreement since 2003 — but may be reduced proportionally based on AWLR
Superannuation (age 60+): tax-free in Australia — but Spain taxes the full amount at progressive IRPF rates
Government super (CSS, PSS, military): taxable only in Australia (Art. 19)
UK State Pension for dual AU/UK retirees: frozen in Australia, but uprated in Spain (EU member state)
Medicare: eligibility ceases after 5 years continuously overseas — no reciprocal agreement with Spain
Age Pension
The Australian Age Pension is payable overseas indefinitely thanks to the Australia–Spain Social Security Agreement (in force since 2003). But the rate may be reduced after 26 weeks based on your Australian Working Life Residency (AWLR). If your AWLR is 35 years or more, you receive the full rate. Below 35 years, the pension is proportional: (AWLR months / 420) x maximum rate.
Several supplements are lost or reduced overseas: Rent Assistance stops after 26 weeks, Energy Supplement after 6 weeks, and Pension Supplement drops to the basic rate after 6 weeks.
Spain taxes the full Age Pension as renta general at progressive IRPF rates. The social security agreement allows totalization of periods — Spanish contribution periods can count toward the 10-year Australian residence minimum.
Superannuation — the gap between Australian and Spanish treatment
This is the biggest issue for Australian retirees. In Australia, superannuation withdrawals after age 60 from a taxed fund are completely tax-free — both lump sums and income streams. Spain does not recognise this.
Spain treats super withdrawals as taxable income at progressive IRPF rates (19–47%+). Because Australia charges no tax on the withdrawal, there is no Foreign Tax Credit available to offset the Spanish tax. You go from 0% to up to 47% simply by changing where you live.
Classification matters: whether Spain treats super as general income (renta general, 19–47%) or savings income (renta del ahorro, 19–30%) depends on the structure. Some Spanish advisers argue Australian super more closely resembles an investment/savings product than a pension plan, potentially warranting savings-rate treatment on the gain portion only. This is a contested area requiring specialist advice.
The life annuity option — Spain's age-based percentage table
If super income is structured as a life annuity (renta vitalicia), Spain applies an age-based percentage table — only a fraction of each payment is taxable, at savings rates (19–30%):
Age at annuity start
Taxable %
Effective max rate
Under 40
40%
12.0%
40–49
35%
10.5%
50–59
28%
8.4%
60–65
24%
7.2%
66–69
20%
6.0%
70+
8%
2.4%
The percentage locks at commencement and does not change. At age 66–69, only 20% of each payment is taxable; at the top savings rate of 30%, the effective rate is 6%. At 70+, only 8% is taxable — an effective rate of 2.4%. This makes annuity structuring extremely attractive for Australian retirees, but it requires the income to genuinely qualify as a renta vitalicia under Spanish domestic law.
Lump-sum withdrawals — the 30% reduction
If you draw super as a lump sum, Spain may allow a 30% reduction for irregular income (rentas irregulares) if the amount was generated over 2+ years and is received in a single tax year. This reduction is capped at €300,000 and cannot be reapplied within 5 years. It reduces the effective tax rate but does not eliminate it.
Self-managed super funds (SMSF)
Maintaining an SMSF from abroad is high-risk. Three tests must be satisfied at all times: the establishment/assets test, the central management and control test, and the active member test. A 2-year safe harbour applies for the central management test if your absence is genuinely temporary, but beyond that, strategic decisions must "ordinarily" be made in Australia.
If the SMSF fails these tests, it loses its complying status and is taxed at 45% on total assets minus non-concessional contributions. No ATO discretion or grace period. Consider rolling your SMSF into a retail or industry fund before moving permanently, or appointing an Australian-resident trustee with appropriate powers.
Proposed reforms to extend the safe harbour to 5 years and remove the active member test have been announced but are not yet legislated as of July 2026.
Commonwealth and military superannuation
Under Article 19(2)(a) of the Australia–Spain treaty, government service pensions (CSS, PSS, MSBS, DFRDB, MilitarySuper) paid by Australia for services to the Australian government are taxable only in Australia. Spain must exempt them, though it may use the amount for rate calculation (exención con progresividad).
Exception: if you hold Spanish citizenship (and are not also Australian), the pension flips to Spanish-only taxation under Article 19(2)(b).
CGT on departure — don't forget your Australian home
Australia's CGT Event I1 deems all assets (except taxable Australian property, primarily real estate) to be disposed at market value when you cease residency. You can elect to disregard the event, but your assets then become Taxable Australian Property and the 50% CGT discount is apportioned based on days as a resident vs. total ownership.
The main residence exemption trap: from 1 July 2020, non-residents at the time of sale generally lose the main residence CGT exemption entirely — not apportioned, but denied. Narrow life-event exceptions may apply (terminal illness, death of spouse, relationship breakdown — and only if abroad for 6 years or less). If you plan to sell your Australian home, do it before leaving to preserve the full exemption.
Medicare
Medicare eligibility continues for up to 5 years from your date of first departure. After 5 years continuously overseas, eligibility ceases. There is no reciprocal healthcare agreement between Australia and Spain. You'll need to arrange Spanish healthcare — either registration with the public system (once resident) or private insurance.
The timing play for Australians
Because super withdrawals go from 0% (Australia) to up to 47% (Spain), the pre-residency window is more valuable for Australians than almost any other nationality. Consider:
Taking super lump sums while still Australian tax resident (0% after age 60)
Selling the Australian home before departure (preserves main residence exemption)
Crystallising capital gains while still in Australia (50% discount available)
Rolling SMSF into a retail fund if maintaining compliance from abroad is impractical
Treaty: South Africa–Spain Convention, signed 2006, in force since 2008 · SARS treaty list
Private pensions (retirement annuities, provident funds): taxable only in Spain (Art. 18) — apply for SARS DTA directive to reduce/eliminate SA withholding
GEPF (government pension): taxable only in South Africa (Art. 19)
Living annuity income: SA withholds PAYE by default — DTA relief available via SARS directive
Two-pot system (from Sep 2024): savings component accessible, taxed at marginal rate in SA
Modelo 720: SA retirement fund balances above €50,000 must be declared
Retirement lump sum tax: 0–36% on cumulative lifetime withdrawals in SA
How the treaty works
The South Africa–Spain treaty follows the standard OECD model. Article 18 gives the residence state — Spain — exclusive taxing rights on private pension income. Article 19 reserves government service pensions for the paying state — South Africa. Spain eliminates double taxation via the deducción por doble imposición internacional (Art. 80 LIRPF): any SA tax paid is credited against Spanish tax on the same income.
The practical result: if you're Spanish tax resident drawing a private retirement annuity or provident fund pension from SA, Spain taxes the full amount as renta general at progressive IRPF rates (19–47%+, varying by region). SA should not tax it — but you need to obtain a SARS DTA directive to stop the default PAYE withholding.
GEPF — Government Employees Pension Fund
The GEPF is Africa's largest pension fund, with over 1.2 million active members and assets above ZAR 2.6 trillion. Under Article 19, pensions paid by South Africa for services to the SA government are taxable only in South Africa. Spain exempts them but uses the amount for rate calculation (exención con progresividad). You still declare the income on your IRPF return with the treaty exemption noted.
GEPF pays pensions to members living abroad. Submit periodic life certificates to the Government Pensions Administration Agency (GPAA) to keep payments flowing.
Retirement annuities (RAs) and preservation funds
Private retirement annuities, pension preservation funds, and provident preservation funds all fall under Article 18: taxable only in Spain. SA administrators withhold PAYE by default — apply to SARS for a DTA tax directive (form RST01) to reduce or eliminate the withholding. This requires a Non-Resident Tax Status Confirmation Letter from SARS.
Spain treats the income as renta general at progressive IRPF rates. No special pension reduction applies — Spain does not classify SA retirement funds as planes de pensiones under Spanish pension legislation.
Living annuities
Living annuity drawdowns are pension income under the treaty — taxable only in Spain. Apply for SARS DTA relief to stop the SA withholding. Spain taxes the full amount as renta general.
The annuity structuring question: if the living annuity qualifies as a renta vitalicia under Spanish domestic law, Spain's favourable age-based percentage table could apply — only 8–40% of each payment would be taxable at savings rates (19–30%), producing effective rates as low as 2.4% for those aged 70+. Whether a South African living annuity meets the Spanish definition is a specialist question — a living annuity is not guaranteed for life (it depends on the underlying investment), which may disqualify it. Get advice before assuming it qualifies.
The two-pot system — what changed in September 2024
From 1 September 2024, South Africa's retirement system split into two pots. One-third of new contributions goes into a "savings component" (accessible once per tax year, minimum ZAR 2,000) and two-thirds into a "retirement component" (locked until retirement). A once-off "seed capital" amount was transferred from existing savings to the savings pot.
Withdrawals from the savings component are taxed at your marginal income tax rate in SA — not on the lump sum tables. For non-residents, SA applies this via a tax directive. If the DTA gives Spain taxing rights, you can apply for relief, but SARS's practice on two-pot DTA relief for non-residents is still evolving.
Tax emigration — the 3-year rule
South Africa replaced "financial emigration" with "tax emigration" from March 2021. From 1 September 2024, the old "emigration withdrawal" category via SARB was removed entirely. To access your full retirement fund before retirement age:
Cease to be a South African tax resident
Maintain non-resident status for 3 uninterrupted years
Obtain a Non-Resident Tax Status Confirmation Letter from SARS
Apply for a tax directive — the withdrawal is taxed on the lump sum table (0–36%)
The 3-year clock starts when SARS recognises your non-residency. If you left SA years ago but never formally ceased tax residency with SARS, the clock hasn't started.
Retirement lump sum tax — what SA takes
Cumulative lifetime amount
Rate
Up to ZAR 550,000
0%
ZAR 550,001 – ZAR 770,000
18%
ZAR 770,001 – ZAR 1,155,000
27%
Above ZAR 1,155,000
36%
These are cumulative lifetime amounts — every lump sum since 1 October 2007 is aggregated before the table is applied. If Spain has taxing rights under the DTA, Spain credits the SA tax paid.
Modelo 720 and wealth tax
Your SA retirement funds go on Modelo 720. Any SA retirement fund, living annuity, or preservation fund balance above €50,000 must be declared annually on Modelo 720 (Category 2: securities/insurance). SA retirement funds are also included in the base for Spanish wealth tax (Impuesto sobre el Patrimonio) and the solidarity tax (ITSGF) if your net wealth exceeds the thresholds.
Exchange control — getting money out of SA
South Africa maintains exchange controls via the Reserve Bank. Retirement fund proceeds can be transferred abroad once the tax directive is obtained and tax paid. For other assets, a foreign capital allowance of up to ZAR 10 million per calendar year applies (tax clearance required above ZAR 1 million). The Rand is volatile — ZAR/EUR swings of 10–15% in a year are normal. Some retirees time large transfers or use forward contracts.
Spain taxes worldwide income of tax residents — including foreign pensions
Foreign pension income is renta general, taxed at progressive IRPF rates (roughly 19–47%+, varies by region)
Tax treaties determine whether your home country can also tax the pension — check Spain's treaty list
Spain uses the credit method: tax paid in your home country is credited against Spanish tax on the same income (Art. 80 LIRPF)
No special pension regime exists — the Beckham regime excludes retirees
The general framework
Spain has tax treaties with over 90 countries. The pension provisions typically follow the OECD Model Convention: private pensions are taxable only in the country of residence (Spain), while government pensions are often taxable only in the paying state. But the details vary — some treaties have specific provisions for social security, lump sums, or particular pension types.
Regardless of the treaty, Spain taxes foreign pension income at progressive IRPF rates as renta general. The personal allowance for those aged 65+ is €6,700 (€8,100 for 75+). If the pension income is structured as a life annuity, Spain's age-based percentage table may apply — potentially reducing the taxable portion significantly.
All foreign assets above €50,000 per category must be declared on Modelo 720 (deadline 31 March annually). Foreign pension accounts typically fall under Category 2 (securities/investments). Spanish wealth tax also applies to worldwide assets above the regional exemption.
We're adding detailed pension guides for more source countries. If yours isn't covered yet and you'd like specific guidance, get in touch and we'll connect you with a cross-border tax adviser who works with your nationality in Spain.
This section is general information, not tax advice. Cross-border pension taxation is personal — the interaction between treaties, domestic law, pension type, timing, your comunidad autónoma, and your individual circumstances means no two situations are identical. Engage a professional licensed in both countries before triggering residency or drawing down any retirement account.
The Beckham regime — 24%, but not for retirees
Spain's impatriate regime (art. 93 LIRPF) taxes Spanish employment income at a flat 24% up to €600,000 (47% above) for the year of arrival plus five more, with foreign income largely out of scope, wealth taxes limited to Spanish assets, and no Modelo 720 filing. It's open to employees — explicitly including digital-nomad-visa holders working remotely for foreign employers — plus directors, entrepreneurs and qualifying professionals, if you haven't been Spanish resident in the prior 5 years. Retirees and passive-income earners do not qualify: a work or entrepreneurial trigger is mandatory. If someone is selling you "Beckham for your pension", walk away.
Wealth tax, the solidarity tax, and Modelo 720
Wealth tax (Patrimonio): state allowance of €700,000 per person plus €300,000 on your main home. Several regions (Madrid and Andalucía near or at 100%) rebate it heavily — but…
Solidarity tax (ITSGF): a state tax of 1.7% / 2.1% / 3.5% on net wealth above €3M (effective entry ≈ €3.7M with the allowance), which claws back what regional rebates give. "Wealth-tax-free Madrid" is only true below roughly €3.7M. Extended indefinitely and still in force for 2026.
Modelo 720: an annual information return on foreign assets in three categories (accounts; securities/insurance; real estate) — required per category above €50,000, re-filed if a category grows by €20,000. Deadline 1 January–31 March. Penalties were normalised after the 2022 EU court ruling; ordinary information-return fines now apply. Your US brokerage, Canadian RRSP, UK SIPP, and Australian super all go on it.
No citizenship-based taxation: Spain taxes by residence only — leaving Spanish residence ends worldwide exposure (watch the art. 95 bis exit tax on large share portfolios if you stayed long). US citizens, of course, carry US filing obligations everywhere for life.
Tax obligations don't stop at the border — whether you're coming from the US, Canada, the UK, or Australia. We'll match you with a cross-border tax adviser we've checked ourselves — credentials, licensing, and real client outcomes in Spain.