Emigrating to Spain has various tax, social security and legal implications, including on the taxation of your supplementary pension. Think of group insurance, a VAPZ or an IPT. In this article, we explain the tax consequences for your supplementary pension when you move to Spain as a Belgian.
Tax residence in Spain
Once you qualify as a tax resident in Spain, you are taxed there on your worldwide income and assets. This means that the supplementary pension you accrued in Belgium will also be subject to Spanish tax.
You are considered a resident under Spanish tax regulations if one of the following conditions is met:
- You spend more than 183 days per calendar year in Spain (sporadic absences count, unless you prove you were staying elsewhere);
- Your economic interests are mainly in Spain;
- Your spouse and/or minor children usually reside in Spain.
Please note that this tax status applies for the entire calendar year, regardless of at what time you move.
Read more about the tax implications of emigrating to Spain.
Spanish tax on supplementary pensions
In Spain, local pension plans have several options for paying out the pension capital. You can choose:
- A one-off payout of the entire capital;
- A staggered withdrawal through periodic payments (monthly, quarterly, annually);
- A combination of both options.
The form of payout chosen affects the tax rate. Spain considers pension capital withdrawn as professional income. This is taxed through personal income tax, along with your other income, at progressive rates ranging from 19% to 47%.
If you choose to withdraw the entire capital at once, you will soon find yourself in a higher tax bracket, with a significant tax consequence.
Example:
Suppose you retire in 2025 and receive your supplementary pension capital of €100,000 that year. Your other taxable income in 2025 is €60,000. You choose to receive the full capital in the same year. Then your total income in 2025 is €160,000. The part above €60,000 falls into the 45% tax bracket, so your pension capital will be taxed at that high rate.
However, if you withdraw €5,000 annually, your taxable income in 2025 will be only €65,000 (still taxed at 45%). From 2026, your taxable income-the statutory pension-will be €20,000. From 2026, your total taxable income drops to €25,000 (€20,000 statutory pension + €5,000 supplementary pension), so the supplementary pension falls into a lower bracket, in this case the 30% bracket.
Learn more about Spanish taxes on your state pension here.
Supplementary pension for Belgians in Spain
Most Belgian supplementary pension plans pay out the capital in one lump sum. If you are a tax resident of Spain at the time, Spain has the right to tax this capital according to Spanish personal income tax. However, you can claim a reduction based on any withholding tax already paid (if applicable) in Belgium, under the double taxation treaty between Belgium and Spain. So bear in mind that emigrating to Spain could have a significant negative impact on your supplementary pension.
