Non-Residents, Pension

By: Josep Navarro

Please inform me if i need to declare income from my hm forces pension payable by Paymaster UK on my anual income tax return to the spanish tax authorities.

In accordance with the second article , the PENSION PERCEIVED by a Public Servent of UK, it isn't submited to imposition in the Spanish personal income tax, except if this person possesses Spanish nationality.

With rules/doctrine ARTS. 18 AND 19. AP. 3 CONVENTION; DGT 21.10.93.

Spanish tax for residents

If you have been living in Spain for six months (183 days) or more of the calendar year (not necessarily consecutively) or you have your main ‘vital’ interests in Spain (for example, your family or business is in Spain), then you are classed as a Spanish resident for tax purposes.

As a Spanish resident, you will need to submit a Spanish tax return and pay Spanish income tax on your worldwide income if:

your annual income from employment is more than €22,000;
you are self-employed or run your own business;
you receive rental income of more than €1,000 a year;
you have capital gains and savings income of more than €1,600 a year;
it is your first year declaring tax residency in Spain.
You will have to declare all assets abroad worth more than €50,000 (using Modelo 720, or ‘Form 720’). Your taxable income is the income left after deductions for contributions to social security in Spain, pension, personal allowance, professional costs, etc. Spanish tax rates are progressive.

Tax in Spain for non-residents

If you live in Spain for less than six months (183 days), you are classed as a non-resident and will only be taxed on the income earned in Spain. Your income is taxed at flat rates with no allowances or deductions. If you are a non-resident and own a property in Spain, whether or not you rent it out, you will need to submit a tax return and pay Spanish property taxes for non-residents (or ‘imputed’ income tax on your property) as well as local Spanish property taxes. See Spanish non-resident tax rates.

Dual taxation agreements

Spain has signed many treaties with other countries to avoid double taxation (ie. paying tax in your home country and in Spain). The Spanish tax authority (Agencia Tributaria) maintains an up-to-date list of treaties.