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V3311-16 ·14 July 2016 ·consulta-vinculante Medium impact
Tax

Foreign pension withholdings may be deductible if they constitute social security contributions

A Dutch taxpayer residing in Spain inquired whether withholdings from their Dutch pensions, intended to cover medical assistance in Spain, are deductible for Personal Income Tax (IRPF) purposes. The Directorate General for Taxes (DGT) ruled that if these amounts are classified as social security contributions, they are deductible.

In 5 key points

How it affects those involved

This ruling clarifies that social security contributions paid in a foreign country can be treated as deductible expenses in Spain, provided they meet the legal definition of social security payments, potentially reducing the taxable income of expatriates receiving foreign pensions.

Lifecycle

2016-07-14PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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