Pensions in Spain: receiving your retirement pension while living here

After years of hard work the time has come to fulfil your dream: say "hasta la vista" to everyone and move to Spain. Why not? Spain offers everything you need for a good life: sun, excellent food, fiestas, long walks on the beach… But before you pack your bags and book your flight, you need to know how receiving a pension abroad works.

When you reach retirement age you will need to submit an application to ZUS (the Polish social insurance institution). If you also worked in another EU country, ZUS is responsible for putting together the documents and sending them to the insurance institutions of the countries that owe you benefits. That is where the procedure to establish entitlement under each country's rules begins.

In Spain the retirement age is 65 and the required work record is at least 15 years. If you have a shorter record, the rule of totalising work periods in the EU applies. Remember that each of these benefits is a separate pension, paid by the Polish and Spanish institutions respectively.

Watch out for taxes

Any foreigner living in Spain who receives a pension must declare the income in the annual tax return as income from work. Spain has signed agreements with other countries to avoid double taxation, under which:

• public pensions are not taxed in Spain and are taxed in the country that pays them. There are exceptions, such as Germany and the United Kingdom, whose pensions must be included in the Spanish tax return (IRPF),
• private pensions must be declared in Spain, even if they are paid by a foreign social security or employment authority. Most agreements provide that they are taxed only in the country of residence.

The rules depend on your personal situation and the specific double taxation agreement, so it is worth consulting a tax adviser before moving. See also: taxes in Spain and residency in Spain.