Germany-Spain Double Taxation Treaty — Tax Guide for German Expats

The Germany-Spain Doppelbesteuerungsabkommen (DBA)

The Abkommen zwischen der Bundesrepublik Deutschland und dem Spanischen Staat zur Vermeidung der Doppelbesteuerung — the Germany-Spain double taxation agreement (DBA) — has been in force since 1968, with amendments through subsequent protocols. For the thousands of German nationals living, working, or retiring in Spain, this treaty determines which country has the right to tax specific types of income.

Pension Taxation — Where Is Your Rente Taxed?

Pension taxation under the DBA depends on the pension source:

• German state pension (gesetzliche Rente from Deutsche Rentenversicherung): Under the current treaty, German state pensions paid to residents of Spain are taxable in Spain. Germany may also tax under its domestic rules, but Spain grants a credit to avoid double taxation
• German civil service pensions (Beamtenpensionen): These remain taxable exclusively in Germany under Article 19, unless the recipient also holds Spanish nationality
• Company pensions (betriebliche Altersversorgung): Generally taxable in Spain as the country of residence
• Riester-Rente and Rürup-Rente: Private pension plans are taxable in Spain. However, the tax treatment of past German deductions can create complexities — specialist advice is recommended

Rental Income on Property

Under the DBA:

• Rental income from German property is taxable in Germany, but must also be declared in Spain. Spain grants a tax credit for the German tax paid
• Rental income from Spanish property is taxable in Spain under the IRPF

German tax residents who move to Spain should note that Germany’s limited tax obligation (beschränkte Steuerpflicht) continues to apply to German-source rental income even after emigration.

Capital Gains

Capital gains from the sale of real property are taxable in the country where the property is situated:

• Selling a property in Germany → taxed in Germany (subject to the 10-year Spekulationsfrist exemption if held for more than 10 years and not rented)
• Selling a property in Spain → taxed in Spain at progressive rates of 19-28% on the gain

Capital gains from other assets (shares, funds) are generally taxable only in the country of residence. If you move to Spain, German Wegzugsbesteuerung (exit taxation) rules may apply to substantial shareholdings — seek advice before relocating.

The Beckham Law — A Major Opportunity for German Professionals

Spain’s Régimen especial para trabajadores desplazados — commonly known as the “Beckham Law” (Royal Decree 687/2005, updated by Law 28/2022) — allows qualifying individuals who move to Spain to be taxed as non-residents for up to six years. This means:

• A flat 24% tax rate on Spanish-source income up to €600,000 (47% above that)
• No obligation to declare worldwide income (except Spanish-source income)
• No Spanish wealth tax on non-Spanish assets
• No Modelo 720 obligation for overseas assets

To qualify, you must not have been a Spanish tax resident in the preceding five years and must move to Spain for employment, as a company director, or as a digital nomad/entrepreneur (under the 2023 expansion). This is particularly attractive for German executives, remote workers, and professionals relocating to Spain — the savings compared to German top marginal rates (42-45%) and Solidaritätszuschlag can be substantial.

Wealth Tax in Spain

Germany abolished its wealth tax (Vermögensteuer) in 1997. Spain still levies Impuesto sobre el Patrimonio on net assets above €700,000 (plus a €300,000 primary residence exemption). Rates range from 0.2% to 3.5% depending on the autonomous community.

For Germans accustomed to no wealth tax, this can be an unwelcome surprise — particularly for those with significant property portfolios or investment assets. Some regions (notably Madrid) have historically offered 100% bonification, effectively eliminating the tax, though the national solidarity tax (Impuesto Temporal de Solidaridad de las Grandes Fortunas) now applies to net wealth above €3 million regardless of region.

Modelo 720 — Reporting Overseas Assets

German expats in Spain must file the Modelo 720 informative declaration if they hold assets outside Spain exceeding €50,000 in any of three categories: bank accounts, securities/investments, or real estate.

For Germans, this often covers:

• German bank accounts (Girokonto, Tagesgeldkonto, Festgeld)
• Investment portfolios (Depot) at German brokers
• Life insurance policies (Lebensversicherung)
• Property in Germany

This is conceptually similar to Germany’s Auslandskontenregelung and CRS reporting, but the filing is done directly by the taxpayer (not the bank). The deadline is 31 March each year, and only changes exceeding €20,000 require re-filing.

Disclaimer: This article provides general information and does not constitute legal or tax advice. Spanish tax law and international treaties are subject to change. For advice tailored to your individual circumstances, please consult a qualified legal professional.

For a complete overview of taxation in Spain, see our Your Guide to Spanish Tax.