Canary Islands German pension tax: mostly paid in Spain

Who taxes a German pension in the Canary Islands?

The Canary Islands are part of Spain, so German pensions fall under the same double taxation agreement (DBA) as on the mainland. No source we reviewed names a separate Canarian rule.

That is CITA News's reading, not an official statement, and it holds that only the regional tax table and some deductions differ. Spain published the DBA in the BOE (the Spanish state gazette) on 30 July 2012, after both countries signed it on 3 February 2011.

The AEAT, the Spanish tax agency, says the agreement applies from tax year 2013. the official website gives another date and says it took effect on 18 October 2012, replacing the 1966 treaty.

Only Spain may in principle tax the statutory pension of the Deutsche Rentenversicherung (DRV), says the AEAT, citing Article 17 DBA. Germany may add a capped tax.

The cap is 5% of the gross amount for entitlements arising from 1 January 2015 to 31 December 2029. From 1 January 2030 it is 10%.

Germany has no right to tax pensions that began before 2015, says the official website. That fits the AEAT wording, which gives Germany only entitlements from 31 December 2014.

One guide, Ibiza Inside, claims that only Germany taxes the statutory pension. That contradicts the other sources and is unproven, and we did not check the treaty text itself.

When do you count as tax resident in Spain?

You are tax resident in Spain if you stay over 183 days a year or centre your economic interests there. Your family counts too if your spouse and minor children usually live there.

These are the AEAT tests. Residents pay Spanish income tax (IRPF) on their worldwide income, including the German pension.

After emigration the pension stays German domestic income under § 49 EStG, with limited tax liability under § 1 para. 4 EStG. Per Advant Beiten, the basic allowance of 12,348 euros does not apply to emigrants.

It does apply to people with two homes whose life centre is in Germany. A home in Germany that is always available can bring full German tax liability, according to the official website.

So registering in Spain alone does not end German tax liability. Advant Beiten and Finanztip name the Finanzamt Neubrandenburg as the office responsible for pensioners abroad.

The taxable share in Germany depends on the start date. Advant Beiten gives 84% for new pensions in 2026, rising by 0.5 percentage points per start year.

For a 2022 start it gives 82%, which Finanztip confirms. the official website says the pension allowance is fixed in euros and the lump sum for expenses is 102 euros.

How does Spain credit the German tax?

Spain credits German tax up to the cap, according to the AEAT guide (Article 22 DBA). the official website bases this on Article 80 of the Spanish income tax law LIRPF.

Advant Beiten notes that a German tax notice must first set the German tax. Without one, Spain does not recognise it.

In an AEAT example with 2019 figures, the German payer withholds no Spanish IRPF. A pensioner resident in Spain must therefore file a Spanish tax return.

The credit is claimed in that return. the official website calls it the way to assert the German tax in Spain.

The the official website example assumes a gross pension of 21,600 euros with an 80% taxable share, so the German cap of 5% gives 1,080 euros. The Spanish tax is about 8,347 euros before and 7,267 euros after the credit.

These figures come from the Balearics. They show only the mechanism, not Canarian amounts.

A PwC Germany article of 14 May 2013 says the countries exchange pension data automatically from 1 January 2015, meaning pensions from 2014. Data follow in the calendar year after payment.

Pensions taxed only in the residence state, like many company pensions, are excluded. Any change since 2013 is unconfirmed.

What applies to civil servant, company and Riester pensions?

Civil servant pensions are in principle taxed only in Germany under Article 18(2) DBA, says the AEAT. Spain exempts them “con progresividad”, meaning the exempt amount raises the rate on other income.

For a pensioner living in Spain with Spanish nationality, only Spain may tax them. the official website names a further exception for pensions from economic activity, such as former employees of Post, Telekom and Bahn.

Company, Riester and Rürup pensions follow other rules. the official website says German taxing rights depend on whether contributions were subsidised and paid for more than twelve years.

The AEAT guide has no section for them. PwC (2013) says only the residence state taxes company pensions, which we did not check in the treaty text.

Finanztip notes a possible repayment of Riester subsidy after a final move. Sources disagree whether the option of unlimited German tax liability under § 1 para. 3 EStG helps pensioners in Spain.

Finanztip names a 90% income limit for that option. We could not verify it word for word.

How high is income tax in the Canary Islands?

the official website lists seven Canarian income tax bands, from 9% to 26%. The first three are 9% up to 13,748 euros, 11.5% up to 19,422 euros and 14% up to 35,924 euros.

Then come 18.5% up to 57,566 euros, 23.5% up to 93,268 euros and 25% up to 123,745 euros. Above that, 26% applies.

Other sources give other limits. the official website gives 9% up to 13,465 euros and 26% from 121,200 euros, with no year.

Billeo gives 9% up to 12,450 euros. Guiafiscal itself says the table may change in 2026, and a draft law on Canarian IRPF was still open there on 7 November 2026.

the official website gives the personal minimum as 5,606 euros in the Canaries and 5,550 euros nationally. It adds 1,162 euros from age 65 and 1,414 euros from 75.

The site cites Law 9/2025 of 23 December (BOC No. 256, 29 December 2025). We could not confirm that reference in the BOC, the Canarian official gazette.

the official website lists a Canarian deduction of 160 euros for over-65s, with income limits of 46,455 euros (61,770 euros jointly). the official website says 160 euros since 2024, 144 euros before, with limits of 45,500 and 60,500 euros.

For tenants the official website gives 24% of rent, up to 740 euros a year. The cap is 760 euros for under-40s and over-75s.

What must pensioners do, and what remains open?

Movers within the EU apply to their German health insurer for form S1, says Advant Beiten. They then register with the Spanish social security institute INSS.

The DRV may ask for proof of life and stops payment if none comes. Anyone who skips registration or declaration in Spain risks trouble via the data exchange.

the official website, a commercial guide, names five mistakes. Among them are treating the pension allowance as a share of the current pension and believing Spanish registration ends German tax liability.

Others are not crediting German tax in Spain and not declaring the pension. The fifth is mixing up pension start (sets taxable share) and first payment (sets 5% or 10% cap).

The exact deadline for the Spanish tax return is open. the official website names only “early summer” of the following year, and the AEAT guide calls itself purely informative.

We found nothing on Modelo 720 (reporting duty for foreign assets), tax adviser costs or an official Canarian page on foreign pensions. A German-Spanish adviser suits individual cases.

The AEAT guide “Alemania” was updated on 8 April 2026, with the 5% and 10% rule unchanged. The 10% rate applies to entitlements from 2030.

We found no 2026 treaty change. The Canarian table for 2026 depends on the open draft law, which the official website called not yet passed on 7 November 2026.