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V3525-15 17 November 2015 · SG de Fiscalidad Internacional Criterion in force
IRNR · residencia fiscal

Pensions from a Spanish pension scheme of a Chilean resident are only taxed in Chile

A retired resident in Chile asks whether the Spanish bank is obliged to withhold taxes on withdrawals from his pension plan. The DGT responds that, under the bilateral tax treaty with Chile, such income is only subject to taxation in the country of residence.

The question raised

The taxpayer asks whether the Spanish banking entity must withhold tax on the amounts being withdrawn from said Pension Fund.

The DGT's ruling

Income from a pension plan received by a resident in Chile, derived from previous employment in Spain, may only be taxed in Chile pursuant to Article 17.1 of the Double Taxation Convention between both countries. To apply this criterion, the taxpayer must provide the paying entity with the certificate of tax residence issued by the Chilean authority. If undue withholdings have been applied, the interested party must request their refund.

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