There’s a lot of talk about the personal income tax reform (Act of 15 July 2026) and what this means exactly for the tax burden on Belgian pensions. Although there is no general rate increase across all pensions, the new legislation contains various targeted measures that impose tax or reduce benefits. As a result, more and more Belgians are looking abroad — to countries such as Spain — where the tax climate for pensioners is often more favourable.
1. How are pensions treated for tax purposes in Belgium?
Under the Belgian system, pensions fall under the professional income (replacement income). As pensioners do not incur any actual professional expenses in earning this income, they cannot deduct any professional expenses. To alleviate the tax burden on pensions, the legislator has introduced a specific tax relief on pensions.
2. Phasing out tax relief on the highest pensions
The recent tax reform has introduced a number of far-reaching changes:
- Phasing out of the tax relief: The tax relief on the highest pensions is being phased out gradually and, in the case of the very highest pensions, will even be abolished entirely. This will result in a higher effective net tax burden for this group.
- Offsetting the increased tax-free allowance: The general tax-free allowance has been increased, but to prevent people who are not in work (such as pensioners) from deriving a net benefit from this, this effect is offset by an adjustment to the tax relief on pensions.
- Phasing out the marriage quotient: For pensioners who are married or in a legally recognised cohabiting relationship (both of whom have reached the statutory retirement age), the marriage allowance will be phased out completely over a period of 20 years (from the 2027 tax year to 2046).
3. Working pensioners: separate assessment under 33%
To prevent additional income earned after retirement from increasing the tax burden on one’s own pension (as extra income reduces the tax allowance), a new rule will apply from 1 January 2027 separate rate of 33% on the remuneration of working pensioners who have reached the statutory retirement age or 45 years’ service.
4. Emigrating to Spain: Is the tax burden lower there?
Due to Belgium’s high progressive tax rates, many pensioners are considering moving their tax residence to Spain.
A. The Residence Principle under the Double Taxation Agreement (DTA)
Belgium has a bilateral agreement with Spain Double Taxation Convention (DTC) concluded. Under the general rules of the treaty, pensions taxed in the country of residence (the country in which the taxpayer is a resident for tax purposes), with the exception of most pensions accrued in the public sector (e.g. military personnel).
Anyone who moves permanently and registers as a resident in Spain will be taxed there on their worldwide income (including their Belgian pension). Here you will find more information about the taxation of Belgian pensions in Spain.
B. Possibly a significantly lower tax burden
In Spain, tax conditions for pensioners are often more favourable than under the Belgian system:
- Bearings with lower pressure & larger discs: Although Spain also has progressive tax rates, the effective tax burden and additional local levies in many Spanish regions are considerably lower than the top tax rates and surcharges in Belgium.
- No Belgian finishing systems: The specific phasing out of the tax relief in Belgium and the phasing out of the marriage allowance do not feature in the Spanish tax system.
- Regional preferential schemes: Certain Spanish regions offer additional exemptions or reduced rates on assets and income of foreign origin.
Here you will find more information on how the Spanish personal income tax system works.
C. What if you continue to live in Belgium whilst receiving a Spanish pension or owning property there?
Do you remain a Belgian resident for tax purposes, but receive income from Spain (for example, rental income from a Spanish holiday home)?
- Belgian residents must submit their global income declare in Belgium.
- In the case of Spanish property, the right to tax lies with Spain (the source country). Belgium exempts this income, but does apply exemption subject to a progression clause . Foreign income is therefore taken into account when determining the tax rate on your Belgian income, but the tax levied on it on a pro rata basis is reduced.
D. The global picture: Spain taxes more than just pensions
Although the tax on a private pension in Spain is often lower than expected, it is essential to look at the overall tax picture to look into. Spain, in fact, taxes its residents on their global assets and income:
- Capital gains tax (Capital Gains): In Spain, there is a comprehensive capital gains tax on the sale of assets (such as shares, investment funds, cryptocurrencies and property). Whilst a Belgian private individual can often realise capital gains on shares tax-free under normal management, these are subject to progressive taxation in Spain.
- Capital gains tax (Impuesto sobre el Patrimonio / Solidarity tax): Depending on the Spanish region (autonomous community), a wealth tax may apply to global assets exceeding certain exemption thresholds.
- Obligations to declare foreign assets (Form 720): Spanish residents are required to provide a detailed declaration of all foreign bank accounts, investments and property valued at over €50,000.
Conclusion
Whilst Belgium is increasing the tax burden on higher pensions and phasing out family benefits such as the marriage allowance, moving to Spain could offer a net benefit for many pensioners. Under the ‘residence principle’ in the double taxation agreement, a private pension is taxed in Spain upon emigration, where the overall tax burden is often more favourable. However, it is important to consider the full picture.
Are you unsure about the specific (tax) implications of a move on your particular pension and financial situation? Have your circumstances thoroughly analysed in advance to avoid any surprises. Book an appointment for a personalised consultation.
