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V0004-14 3 January 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · residencia fiscal

French disability pension may be exempt in Spain under specific conditions

A Spanish resident enquires whether their French disability pension is subject to Spanish personal income tax. The DGT states that if the individual is a fiscal resident in Spain, the pension is taxable here, but may be exempt if it corresponds to absolute disability or severe disability and the pension is a substitute for Spanish Social Security.

The question raised

Tax residence of the taxpayer and the taxation of the pension under Personal Income Tax.

The DGT's ruling

If the taxpayer is a tax resident in Spain, they shall be taxed on their worldwide income. Pensions from France for previous employment are only taxable in Spain, unless they are public pensions, in which case they would be taxable in France. The pension could be exempt in Spain if the degree of disability is equivalent to absolute disability or severe invalidity and the paying entity replaces the Social Security system.

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