Important Notice about Civil Service Pensions

There was too much confusion this year 2016 about declaring or not declaring Civil Service Pensions from this year’s Annual Income Tax Return but the problem has not finished.Public Pension State Pension Old Age Pension Civil Service Pension

Under Spanish Income Tax Rules, that people whose income is under 11,500€ did have the possibility of not declaring their Income to the Spanish Tax Authorities and some advisors considered that Civil Service Pensions were not included to calculate that limit. This is not true.

Thanks to a question made to the Tax Authorities which creates a precedent, Civil Service Pensions have to be considered to be over that limit or not.

The question we made to the Tax Office was if a retired person receiving a State Pension/Old Age Pension of 8,000€ per year and a Civil Service Pension (“Police Pension” or “Teachers Pension” for example) of 8,000€ per year, had the obligation of filling a Tax Return or not. The answer is that a recent resolution said that even when the person only had a Civil Service Pension of 12,000€ per year (So it is not taxable in Spain, it is called “Rentas Exentas”), that person HAS THE OBLIGATION OF FILLING A TAX RETURN. Then, limit of 11,500€ is based on the sum of all your sources of income and not only the income taxable in Spain.

As an example, we could consider a lady receiving a State Pension of 5,000€ per year and also, a Public Pension of 7,000€ per year. Would this lady have the obligation of filling a Tax Return in Spain? The answer is YES. She will not have to pay any Tax, but the income has to be declared every year.

We have already contacted our clients on this situation to make sure they do not have any problem with the Tax Office in the future so, if you think you may be on this situation or you know somebody, please do let them know or ask them to contact us so we could clarify the situation on our telephone number 965705502 or by email on info@tacs4expats.es

You could also have a look to our previous post about Civil Service Pensions on our Blog!

And remember, we are here to make your life easier in Spain! Our mission is to make you understand what you have to do and why.

3 Comments

  1. So if I’m living in Spain, will I have to declare my RAF pension of 20k on a Spanish tax return even if it’s taxed in the uk? Perhaps I’d be better having it paid and taxed in Spain?

    • Hi Derek, thanks for your comment.

      Yes, you will have to declare that income on a Spanish Income Tax Return before the 30th June.

      No, that pension can only be taxed in UK but the reason why you have to declare it is to let the tax office know where does your income come from.

      We could do it for you so, if you were interested please, send us an email to info@tacs4expats.es with your contact details and we will give you a call on Monday.

  2. So if i receive a military pension and an NHS pension that are taxed at source (UK) but i am under pension age what do i do? The NHS pension only started in May 2016. This is the first year we have been residents. my husband also receives a Military pension.

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