If you receive a pension from Italy and live in Spain, the Double Tax Agreement between Spain and Italy (1977) 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 Italy is in principle subject to Spanish IRPF. The Double Tax Agreement (DTA) between Spain and Italy (1977) 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).
Italian public sector pensions (paid to former state employees including teachers, military, police, and other public employees) are government service pensions taxable only in Italy under the DTA.
Italian INPS pensions and complementary fund distributions are taxable in Spain. The INPS should apply DTA relief once you provide a Spanish residency certificate (Certificato di residenza fiscale).
Italian state pension (INPS pensione di vecchiaia) is taxable in Spain. Provide INPS with evidence of Spanish residency to obtain DTA relief from Italian withholding. Apply to the Agenzia delle Entrate for the appropriate documentation.
Italian pension fund (fondo pensione) accounts with accumulated values exceeding 50,000 EUR should be assessed for Modelo 720 reporting.
Tell your Italy pension provider about your Spanish residency and request DTA withholding relief.
Include all Italy 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 Italy. Private/occupational pensions are taxable in Spain. Classification drives the whole analysis.
Review whether your Italy pension vehicle (defined contribution fund, personal plan) exceeds the 50,000 EUR reporting threshold for Modelo 720.
The Double Tax Agreement between Spain and Italy was signed in Rome on 8 September 1977 and entered into force in 1977. The DTA follows the OECD Model Convention, with pensions addressed in Articles 17 (pensions) and 18 (government service):
INPS (Istituto Nazionale della Previdenza Sociale) is Italy's dominant social insurance institution. The main pension for private-sector employees is the pensione di vecchiaia (old age) or pensione anticipata (early retirement) under the AGO — the general compulsory insurance scheme. These pensions are calculated under the contributivo system (contribution-based, for post-1996 entrants), the retributivo system (salary-based, for pre-1996 entrants), or a mixed system. For a Spanish resident, the full INPS/AGO pension is taxable in Spain under Article 17 of the DTA. Italy applies a ritenuta alla fonte (withholding at source) by INPS — you must request DTA relief (see below) to have it eliminated or reduced.
Self-employed workers, freelance professionals, and parasubordinati (co-ordinated quasi-employees — cococo/cocopro) registered with INPS's Gestione Separata accrued pension rights under that separate management. Payments from Gestione Separata are private pensions taxable in Spain.
Artisans (artigiani) and traders (commercianti) contribute to dedicated INPS funds (Gestione degli artigiani, Gestione dei commercianti). Their pension benefits are private pensions taxable in Spain.
Former INPDAP (Istituto Nazionale di Previdenza per i Dipendenti dell'Amministrazione Pubblica) administered pensions for state employees — now absorbed into INPS (Fondo Pensione dei Lavoratori Dipendenti — public sector). This covers central government civil servants, local authority employees (Comuni, Province, Regioni), teachers in state schools (insegnanti statali), doctors and nurses in public hospitals (SSN), police (Polizia di Stato, Carabinieri, Guardia di Finanza, Polizia Penitenziaria), military (Esercito, Marina, Aeronautica), and magistrates. These are government service pensions taxable only in Italy under Article 18 of the DTA — unless the recipient is a Spanish national.
Italy has 20 privatised professional pension funds (Casse Previdenziali) for regulated professions, including:
These funds are private bodies (following Legislative Decree 509/1994 and 103/1996) operating under private law. Their pensions are generally classified as private pensions under Article 17 — taxable in Spain. However, specific analysis is required for each cassa, as some retain quasi-public characteristics. In most cases, Spanish IRPF practice treats casse professionali pensions as private and declares them in IRPF.
Italy's supplementary pension system (legislated under Legislative Decree 252/2005) comprises both collective funds (fondi negoziali — sector-based, and fondi aperti — open to all) and individual pension plans (Piani Individuali Pensionistici — PIPs). Key characteristics for Spanish residents:
The TFR is the most distinctive feature of Italian labour law — a mandatory severance indemnity equal to approximately one monthly gross salary per year of service, accrued throughout the employment relationship and paid on termination (whether by resignation, retirement, or dismissal). Its DTA classification depends on when and how it is received:
Pre-departure planning for TFR: If you have significant TFR accrued in Italy and plan to retire to Spain, consider whether arranging for TFR payment before establishing Spanish residency is advantageous. Italy taxes TFR at a special reduced rate (tassazione separata); Spain would tax it at progressive IRPF rates (with the 30% reduction). Modelling both scenarios is recommended.
Italian pension income taxable in Spain is classified as rendimientos del trabajo. Combined IRPF rates for 2024–2025:
The reducción por rendimientos del trabajo of up to €7,302 (2024) significantly reduces effective IRPF for lower income pensioners. Italy's relatively low average state pension (approximately €800–1,200/month for typical contributors) often means modest Spanish IRPF liability, particularly for pensioners resident in lower-rate regions such as Andalucía or Madrid.
Contact the INPS Pensioni Estero unit in Naples with your Spanish residency certificate to eliminate Italian withholding on pensions taxable in Spain. This process takes several months — start early.
If you have significant TFR accrued in Italy, model whether payment before Spanish residency begins is more tax-efficient. Italy's tassazione separata on TFR can be favourable compared to Spanish IRPF in some cases.
Identify whether your INPS pension is from a government service role (INPDAP/pubblica amministrazione — taxable only in Italy) or private employment (AGO — taxable in Spain). The two categories are legally distinct.
Declare Italian supplementary pension fund and PIP accounts exceeding €50,000. Do not declare INPS entitlements or TFR not yet received.
For expert advice on your Italy 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.
