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V1643-17 26 June 2017 · SG de Fiscalidad Internacional Criterion in force
IRNR · residencia fiscal

Pension withdrawals from private pension plans taxed only in Egypt if residency is proven

A Spanish tax resident in Egypt enquires about the taxation of withdrawals from a private pension and a retirement plan managed in Spain. The DGT determines that as these are not former employment pensions, they are classified as other income and are only taxable in Egypt under the double taxation agreement.

The question raised

Question raised: Country and method of taxation for both retirement plans

The DGT's ruling

If the consultant proves their residence in Egypt, the Convention between Spain and Egypt applies. The amounts from the pension plan and the retirement plan do not qualify as pensions under Article 18 as they are not the result of previous employment, but rather as 'other income' under Article 21. Therefore, these incomes may only be subject to taxation in Egypt. In Spain, no withholding tax shall be applied pursuant to Article 31.4 of the TRLIRNR.

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