Thousands of German retirees live in Spain. If you receive a German pension — statutory pension, civil servant pension, or company pension — this guide explains how it is taxed under the Germany-Spain DTA.
This article is for general informational purposes only and does not constitute tax or legal advice. Pension taxation is complex and depends on individual circumstances, applicable Double Tax Agreements, and legislation that changes regularly. Always consult a qualified international tax specialist before making decisions. Jacob Salama · internationaltaxlegalspain.com · Bar Nº 11.294 ICAMálaga.
If you are a Spanish tax resident receiving a pension from Germany, the taxation of that pension is governed by two bodies of law: Spain's domestic IRPF rules and the Double Tax Agreement (DTA) between Spain and Germany. Understanding both is essential to ensuring you pay the correct amount of tax — in the correct country.
The DTA between Spain and Germany (Article 17/18 on pensions) contains provisions that determine which country has the right to tax each category of pension income. The treaty follows the OECD Model Convention in distinguishing between:
The Germany-Spain DTA has been in force since 1966 and was updated in 2011. It follows the OECD Model closely. The Bundeszentralamt für Steuern (Federal Central Tax Office) in Germany is the competent authority for reduced withholding applications.
German pension income included in Spanish IRPF is treated as 'rendimientos del trabajo'. A key benefit is the work income reduction allowance ('reducción por rendimientos del trabajo'), which reduces the taxable base on modest pension incomes. For larger German pensions, IRPF rates of 30%–45% may apply on the upper amounts.
Germany's statutory pension (Deutsche Rentenversicherung) is taxable in Spain under the DTA. Germany applies progressive taxation to its residents' pensions; for non-residents, Germany has historically sought to retain some taxing right, but the DTA gives the primary right to Spain as the residence country. Apply to the German Bundeszentralamt für Steuern for reduced German withholding as a Spanish resident.
German pension vehicles — including Riester and Rürup plans — where you hold a quantifiable account balance may require Modelo 720 declaration if the balance exceeds €50,000. Defined benefit entitlements from former employers are more complex to value and report.
Inform your Germany pension provider of your Spanish tax residency. Request that they apply the DTA rate (or zero withholding for government pensions taxable only in Germany) by providing a Spanish tax residency certificate.
Include all pension income in your annual IRPF return (Modelo 100, filed May–June). Claim any foreign tax credit for taxes properly withheld in Germany to avoid double taxation.
Determine whether your pension is "government" (typically source-country only taxation) or "private/occupational" (typically residence-country taxation). This classification drives the entire tax analysis.
Review whether your Germany pension vehicle triggers Modelo 720 reporting obligations. This is particularly relevant for defined contribution funds and personal pension accounts exceeding €50,000.
For expert advice on your Germany pension and Spanish tax position, contact internationaltaxlegalspain.com.
The Deutsche Rentenversicherung (DRV) is Germany's statutory pension insurance system. Understanding the different pension types it provides is essential for correct Spanish tax treatment, because each type may be classified differently under the Germany-Spain DTA.
The standard Altersrente is paid to former employees who have reached statutory retirement age and accumulated sufficient contribution periods (Wartezeit). It is funded by the statutory insurance system rather than by a specific government employer. Under the Germany-Spain DTA, Altersrente is treated as a private/social security pension under Article 17, meaning the country of residence — Spain — has the primary taxing right. Germany should not withhold tax once a Freistellungsbescheinigung (exemption certificate) from the Bundeszentralamt für Steuern is in place. Include the full gross amount in your Spanish IRPF return as rendimientos del trabajo.
The Erwerbsminderungsrente (partial or full disability pension) is also paid by the DRV from the statutory insurance system. It follows the same DTA classification as the Altersrente — Article 17, taxable in Spain as the country of residence. The entire amount must be declared in the IRPF return. Unlike the UK system, where disability benefits may receive more favourable treatment, Germany's Erwerbsminderungsrente is classified as a pension for DTA purposes and receives no special exemption in Spain.
Surviving spouse pensions paid by the DRV (Witwenrente for widows, Witwerrente for widowers) are also statutory insurance payments and are classified under Article 17 of the DTA. They are taxable in Spain as the country of residence. German-resident recipients of these pensions who subsequently move to Spain must notify the DRV of their change of residence and apply for the appropriate DTA treatment to cease German source withholding.
Beamtenpensionen (civil servant pensions) are fundamentally different from the DRV statutory pension. They are paid directly by the federal government (Bundesbeamte), a state government (Landesbeamte), or a municipality (kommunale Beamte) to former Beamte — civil servants who hold a permanent appointment under public law. Key examples include:
Under Article 19(2) of the Germany-Spain DTA, pensions paid in respect of government service rendered to a contracting state, its Land, or a local authority are taxable only in Germany. Spain must exempt these pensions from IRPF. This means a former German Beamter resident in Spain pays German income tax on the Beamtenpension — not Spanish IRPF.
The critical exception: if the recipient is both a Spanish national and a German national (or is only a Spanish national), Article 19(2)(b) provides that the pension is taxable only in Spain. In practice, most German Beamte retiring to Spain are exclusively German nationals, so Article 19 gives Germany the exclusive taxing right. Dual nationals must take specialist advice on which national tie applies.
Common mistake: Many German Beamte in Spain incorrectly declare their Beamtenpension in their Spanish IRPF return. This is an overpayment of Spanish tax. Under Article 19, the Beamtenpension is exempt from Spanish IRPF. Spanish residents with only a Beamtenpension (and income below Spanish filing thresholds from other sources) may not need to file a Spanish IRPF return at all. Take specialist advice to confirm your position.
Betriebliche Altersversorgung (bAV) refers to company occupational pension schemes. German law recognises five implementation channels (Durchführungswege), and their DTA treatment may vary:
Under the Direktzusage, the employer promises to pay a pension directly from its own resources without using a separate pension fund. Funding is shown as a liability on the employer's balance sheet. On retirement, the employer pays the pension directly to the former employee. For DTA purposes: if the former employer is a private company, the pension is a private occupational pension taxable in Spain under Article 17. The fact that the employer funds it directly does not make it a government service pension — Article 19 only applies to pensions paid by or on behalf of a government employer.
The Unterstützungskasse is a separate non-insured pension fund established by the employer. Benefits are paid from the fund but are not legally guaranteed (which is why a separate external insurer is typically required). For Spanish IRPF purposes, payments are treated as occupational pension income — rendimientos del trabajo — and are fully taxable in Spain. The Spanish AEAT does not distinguish between the five bAV channels for IRPF classification purposes; all private-sector bAV payments are employment income taxable in Spain.
A Pensionskasse is a regulated insurance undertaking that provides occupational pension benefits. Contributions from the employer may have been partially tax-free in Germany during the accumulation phase (up to certain limits under §3 Nr. 63 EStG). On distribution, the full payment is taxable in Spain as rendimientos del trabajo. The German Pensionskasse should apply for DTA treatment once you are a confirmed Spanish resident, ceasing German source withholding.
The Pensionsfonds is a more flexible, capital-market-oriented pension vehicle introduced in 2002, supervised by BaFin. Investment risk passes to the employee (unlike the Pensionskasse, which guarantees minimum benefits). Distributions are taxable in Spain as occupational pension income. A key practical point: Pensionsfonds benefits may be taken as a lump sum or as an annuity — the lump sum is fully taxable in Spain as employment income in the year of receipt, which can generate a large IRPF liability in a single year. Advance planning of when and how to draw the Pensionsfonds is important.
The Direktversicherung is a life insurance policy taken out by the employer on behalf of the employee, with the employee as the beneficiary. It is the most common bAV vehicle in Germany. Old policies (before 2005) may have had favourable taxation at maturity under German law. Under the DTA, distributions to a Spanish resident are taxable in Spain as employment income. The AEAT position is that the full distribution (or the periodic annuity amount) is included in rendimientos del trabajo regardless of how the German Direktversicherung was taxed at source.
The Riester-Rente is a state-subsidised private pension plan available to employees and certain other categories of German taxpayers. During the contribution phase, contributions receive German state subsidies (Zulagen) and a tax deduction. On distribution, the full amount (including the state subsidy element) is taxable in Germany under the Nachgelagerte Besteuerung (deferred taxation) principle for German residents. For Spanish residents, under Article 17 of the Germany-Spain DTA, Riester distributions are taxable in Spain as the country of residence. The German state subsidy element does not create a separate Spanish tax issue — the entire distribution is treated as employment income (rendimientos del trabajo) in the IRPF return. Spain has no equivalent product, so the Spanish tax system has no special treatment for Riester contributions or subsidies.
The Rürup-Rente (formally called Basisrente) is designed for self-employed Germans (Selbstständige) and high-earners who cannot fully use the Riester structure. Contributions receive significant German income tax deductions during the accumulation phase. On distribution, amounts are fully taxable as earned income in Germany for German residents. For Spanish residents receiving Rürup annuity payments, the full amount is taxable in Spain under Article 17. There is no partial exemption for the return of capital (unlike some jurisdictions where the capital element of an annuity is tax-free). The entire annuity payment is rendimientos del trabajo in Spain.
Once you are a confirmed Spanish tax resident, you should apply to the Bundeszentralamt für Steuern (BZSt — Federal Central Tax Office) for a Freistellungsbescheinigung (exemption certificate) to stop German withholding tax on private pension income taxable in Spain. The process:
| Pension Type | DTA Article | Country That Taxes | German WHT Rate | Spanish IRPF | Modelo 720 |
|---|---|---|---|---|---|
| Gesetzliche Rente (DRV — Altersrente) | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | No (no fund balance) |
| Erwerbsminderungsrente | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | No |
| Witwenrente / Witwerrente | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | No |
| Beamtenpension (federal/state/municipal) | Art. 19 | Germany only | Standard German rate | No — exempt in Spain | No |
| bAV — Direktzusage (private employer) | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | Possibly (if fund) |
| bAV — Pensionskasse / Pensionsfonds | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | Yes if >€50,000 |
| Riester-Rente | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | Yes if >€50,000 |
| Rürup-Rente (Basisrente) | Art. 17 | Spain (residence) | 0% (after Freistellung) | Yes — rendimientos del trabajo | Yes if >€50,000 |
Pension taxation for expats in Spain is complex. Book a consultation with Jacob Salama, specialist in international pension taxation and double tax treaties.
