How foreign pensions are taxed when you retire abroad: residency, treaties and special regimes

Moving abroad on a pension raises one question before any other: who will tax it, and how much. This article is general information, not tax advice. Rules and rates change, and you will need an adviser in both the country you leave and the country you move to. The special regimes below are described as reported by tax advisers and secondary sources. We did not confirm them on the official tax-authority pages while preparing this text, and we say where sources disagree, so treat every figure as something to check before you act.

Three rules that decide almost everything

• Tax residency. The country where you are tax resident usually taxes your worldwide income. The usual tests are time spent in the country (often more than 183 days in a year) and the "centre of vital interests" (home, family, main economic ties). See tax residency when relocating and the 183-day rule for EU expats.
• Who may tax the pension under the treaty. Many double tax treaties follow the OECD model. In that model a private pension paid to a resident is generally taxable only in the country of residence (Article 18), while a pension paid by a state for government service is generally taxable only in the paying state (Article 19(2)). Real treaties differ, and state social-security pensions are treated differently in some of them, so read the article of the treaty between your two countries.
• How relief works. Under the exemption method the residence country does not tax income that the treaty gives to the other country. Under the credit method it taxes everything but deducts the tax paid abroad. The method changes the result, which is why a "7% regime" does not mean 7% of everything you receive.

For the practical side of moving a pension, see pensions and income abroad for EU residents.

Special regimes for foreign pensioners (reported, to be confirmed)

Several countries offer a lower tax route for foreign pensioners. The points below are what advisers and secondary sources report. Each has conditions, so confirm the current text on the official tax-authority page.

• Greece. A flat 7% on foreign-source income for up to 15 consecutive tax years is reported. Reported conditions: you were not a Greek tax resident in five of the previous six years, and you move your tax residence from a jurisdiction with which Greece has an administrative tax-cooperation agreement. One report says a new tax-authority decision (A. 1192/2026, 22 September 2026) replaced the 2020 procedure, and sources differ on the application deadline and the payment date. Greek-source income stays under normal rates. See retiring in Greece.
• Cyprus. A flat 5% option for foreign pension income is reported, chosen year by year against the ordinary scale. Sources differ on the amount below which no tax applies: advisers mention a tax-free allowance of EUR 3,420, while our own guide describes a EUR 5,000 threshold. Check the Tax Department page before relying on either figure. See retiring in Cyprus.
• Italy. Article 24-ter of the income tax code is reported to allow a 7% substitute tax on foreign-source income for up to 10 years for people who receive a foreign pension and move to a small municipality (up to 20,000 inhabitants) in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia, or to very small municipalities in the 2016-2017 earthquake areas. Italian-source income stays under ordinary tax, and reported rulings of the tax agency say an Italian state pension does not qualify and that a payout that is not a true pension may not qualify either. The 2026 status was not confirmed. See retiring in Italy.
• Portugal. The old regime that gave foreign pensions a favourable rate is reported to be closed to new arrivals, and foreign pensions are reported to be excluded from its replacement, IFICI. A new resident is then taxed at ordinary progressive rates. Sources disagree on the closing date and on the 2026 bands, so we state no band. See retiring in Portugal.
• Spain and Montenegro. Our guides describe no special pensioner regime. Residents pay ordinary progressive tax, and in Montenegro the treaty position decides how a foreign pension is treated. See retiring in Spain and retiring in Montenegro.
• Malta. Advisers describe a retirement programme with a flat rate on foreign pension remitted to Malta, a minimum annual tax and conditions on the share of pension in your income and on minimum stay. One source mentions legal notices that may change the picture. We state no amount: confirm on the Maltese tax administration page.
• United Arab Emirates. It is widely reported that there is no personal income tax on individuals. That does not remove the tax of the country you left until you have really broken its tax residency, and a tax-residency certificate may be asked for. Confirm on the official government portal.

Leaving your home country's tax residency

• Break residency properly. Moving is not enough if your family, home or main interests stay behind. Keep proof of the new residence and, where available, a tax-residency certificate from the new country.
• Check the tie-breaker. If both countries treat you as a resident, the treaty has tie-breaker rules (permanent home, centre of vital interests, habitual abode, nationality). They decide where you are resident for treaty purposes.
• Watch exit taxes. Some countries tax certain assets, such as shareholdings or unrealised gains, when you leave tax residency. Ask before you go, not after.
• Citizenship-based taxation. A few countries, notably the United States, tax citizens wherever they live. A treaty cannot remove that.
• Social contributions and health contributions. Some countries charge health or social contributions on pensions of residents, and an S1 route can change who pays. Ask the pension payer and the health authority.
• Withholding at source. Your pension payer may keep withholding tax until it receives the right forms or a residence certificate. Ask what it needs.

What property changes

• Rental income from the home you keep or buy is normally taxed where the property is, and your country of residence may tax it too, with relief. See annual property tax and bills for owners abroad.
• Selling the home you left can be taxable in that country, including when the sale is soon after purchase. Ask before you sell.
• Inheritance and gift tax follow different rules from income tax. See inheritance and gift tax on property abroad.
• Owning through a company can change the tax picture. See luxury and company-owned property taxes abroad.

A practical sequence

• Before you move, ask your pension payer what it needs and what it will withhold.
• Decide where you will be tax resident and how you will prove it.
• Read the treaty article that covers your type of pension.
• Ask the tax authority of the new country, in writing if possible, whether a special regime applies to you and what it requires.
• File in both countries for the first year, with advice from a tax adviser who knows both systems.
• Keep copies of every certificate, application and payment.

FAQ

Does a 7% regime mean I pay 7% on everything? No. Reports describe it as applying to foreign-source income. Income from the country itself is normally taxed at ordinary rates.

Can I be taxed twice? You can if two countries both treat you as resident or if a treaty does not give relief. Treaties exist to prevent this, but you must claim them correctly.

Do I need a tax adviser? Yes, one who knows both countries. The wrong choice of residence date or form can be expensive.

What this means for a normal retiree

• Do not pick a country for its headline rate alone. Residency rules, treaty articles and the type of your pension decide the result.
• Treat every figure you read, including here, as something to confirm on the official page.
• Plan the exit from your home tax residency as carefully as the arrival.
• Keep your paperwork. Most problems come from proving residence and applying on time.
• Put property, inheritance and healthcare costs into the same plan as the pension tax.

An independent adviser can help you compare countries and bring in a local tax specialist, and D.H. Realting works from Warsaw in that role; ask how any adviser is paid, as you would ask anyone.