If you receive a pension from Ireland and live in Spain, the Double Tax Agreement between Spain and Ireland (1994) determines where you pay tax. This guide explains all pension types.
This article is for general informational purposes only and does not constitute tax or legal advice. Pension taxation depends on individual circumstances and applicable Double Tax Agreements. Always consult a qualified international tax specialist before making decisions. Jacob Salama · internationaltaxlegalspain.com · Bar No. 11.294 ICAMalaga.
As a Spanish tax resident, all worldwide income including pensions from Ireland is in principle subject to Spanish IRPF. The Double Tax Agreement (DTA) between Spain and Ireland (1994) determines which country has the primary taxing right over each pension type. The key distinction is between government service pensions (typically source-country only) and private/social security pensions (typically residence country - Spain).
Irish civil servant pensions (paid by the Irish government, state bodies, and public sector organisations) are taxable only in Ireland under the government pension article of the Ireland-Spain DTA.
Irish occupational pension distributions and ARF withdrawals are taxable in Spain. Irish providers should apply DTA relief once Spanish residency is confirmed. Note: Ireland's 5% per annum ARF deemed distribution rule - even if no withdrawal is made, a 5% imputed distribution is taxable.
Irish State Pension (Contributory) is a social security benefit taxable in Spain. Contact the Department of Social Protection to provide evidence of Spanish residency.
ARF/AMRF accounts held with Irish financial institutions must be assessed for Modelo 720. If the ARF value exceeds 50,000 EUR, annual Modelo 720 reporting is required.
Tell your Ireland pension provider about your Spanish residency and request DTA withholding relief.
Include all Ireland pension income in your annual IRPF return. Claim the foreign tax credit for correctly withheld source-country tax.
Government service pensions are taxable only in Ireland. Private/occupational pensions are taxable in Spain. Classification drives the whole analysis.
Review whether your Ireland pension vehicle (defined contribution fund, personal plan) exceeds the 50,000 EUR reporting threshold for Modelo 720.
The Double Tax Agreement between Spain and Ireland was signed in Madrid on 10 February 1994 and entered into force in 1994. It follows the OECD Model Convention. Pensions are addressed in Articles 17 and 18:
The Irish State Pension (Contributory) is paid to individuals who have made sufficient PRSI contributions during their working life. The maximum weekly rate (2024) is approximately €277.30. For a Spanish resident, the full gross amount is taxable in Spain under Article 17 of the DTA. Ireland operates PAYE (Pay As You Earn) withholding through the DSP (Department of Social Protection); non-residents who are Spanish tax residents and provide evidence of Spanish residency should be paid gross (without Irish tax deduction).
The means-tested Non-Contributory State Pension is also taxable in Spain for Spanish residents, though its small amount (approximately €220/week) means IRPF liability is typically minimal given the work income reduction and personal allowance available in Spain.
Irish employer-sponsored defined benefit schemes were widespread in both private and public sectors. Private sector DB pensions — from companies such as banks, utilities, multinationals — are taxable in Spain under Article 17. Annual pension income from these schemes is declared in IRPF as employment income. Ireland may apply emergency PAYE until proper non-resident withholding arrangements are in place; the employer or scheme trustee should be notified of Spanish residency and a tax exemption (NT coding equivalent — an Irish Revenue R185 form or equivalent non-resident declaration) requested from Revenue.
DC occupational pensions in Ireland typically accumulate in a pension fund managed by a life assurance company. On retirement, the member usually takes the maximum tax-free lump sum (normally 25% of the fund or 150% of final salary, capped at €200,000 under Irish domestic rules) and then uses the balance to purchase an annuity or ARF. The Irish tax-free lump sum on retirement is a domestic Irish exemption — Spain taxes the full lump sum as employment income in the year of receipt. Consider whether taking the lump sum before Spanish residency begins is advantageous (see ARF planning section below).
The ARF is a post-retirement investment vehicle that replaced the former compulsory annuity requirement for DC pension members. It is one of Ireland's most flexible — and most internationally misunderstood — pension vehicles. Key features for Spanish residents:
The AMRF was a restricted ARF requiring a minimum balance to be maintained until age 75 or until the holder qualified for a specified minimum pension income. The AMRF was abolished for new members from 2023 (existing AMRFs were converted to ARFs). Distributions from pre-existing AMRFs are treated identically to ARF drawdowns for Spanish IRPF purposes.
PRSAs are Ireland's portable individual pension savings contracts — the Irish equivalent of a UK SIPP or US IRA. Both Standard PRSAs (capped on charges, limited investment options) and non-Standard PRSAs are included. Drawdowns from a PRSA (whether as an annuity or transferred to an ARF) are taxable in Spain as employment income. The PRSA account balance is reportable in Modelo 720 if it exceeds €50,000.
Irish life annuities purchased with pension fund proceeds are taxable in Spain as employment income. The annuity provider (life insurance company) should be notified of Spanish residency; Irish income tax withholding should be eliminated or minimised under the DTA. Include the full gross annuity in your IRPF return.
The following are Irish government service pensions taxable only in Ireland (unless the recipient is a Spanish national):
The ARF structure creates a unique annual tax planning opportunity. Unlike a fixed annuity, an ARF allows you to choose how much to drawdown each year. For a Spanish resident:
Irish pension income taxable in Spain is classified as rendimientos del trabajo. IRPF progressive combined national + regional rates for 2024–2025:
The reducción por rendimientos del trabajo of up to €7,302 (2024) and the personal allowance of €5,550 (plus age supplements) mean Irish State Pension recipients typically face very modest effective IRPF rates.
Notify Irish Revenue and the Department of Social Protection of your Spanish residency. Request elimination of PAYE withholding on all pensions taxable in Spain. Obtain NT (No Tax) coding for occupational pensions from Revenue.
Manage annual ARF drawdowns to optimise your Irish imputed distribution compliance while keeping Spanish IRPF in lower brackets. Large single-year drawdowns may attract the 37%–47% IRPF rates.
If you have not yet retired, assess whether taking the retirement lump sum before Spanish residency begins removes it from Spanish IRPF entirely. Pre-entry planning is key.
Declare ARF, AMRF, and PRSA accounts exceeding €50,000 in Modelo 720. File by 31 March for the prior December 31 balance. Re-file only on increases of more than €20,000.
For expert advice on your Ireland pension and Spanish IRPF position, contact internationaltaxlegalspain.com.
Book a consultation with Jacob Salama, specialist in international pension taxation and double tax treaties in Spain.
