Ireland-Spain Double Tax Treaty — What Irish Expats Need to Know

The costly assumption Irish expats make is that Irish-source income stays taxable only in Ireland — once you’re Spanish resident, Spain usually becomes the primary taxing state.

Overview of the Ireland-Spain Double Taxation Agreement

The Convention between Ireland and Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital was signed in 1994 and has been in force since then. It follows the OECD Model Tax Convention and governs how income, capital gains, and other forms of revenue are taxed when individuals or companies have connections to both countries.

For Irish expats living in Spain, this treaty is the single most important document governing your tax position. It determines which country has the primary right to tax each type of income, and how the other country provides relief to prevent the same income being taxed twice.

Employment Income — Article 15

Under Article 15 of the DTA, employment income is generally taxable in the country where the work is physically performed. If you are an Irish citizen living and working in Spain, your employment income is taxed in Spain under the standard IRPF rules (progressive rates from 19% to 47%).

There is an exception for short-term assignments: if you are employed by an Irish company, are present in Spain for fewer than 183 days in a 12-month period, and your salary is not borne by a Spanish permanent establishment, the income may remain taxable only in Ireland. However, once you establish Spanish tax residency, this exception rarely applies.

Pension Income — Article 18

Article 18 is the most relevant provision for Irish retirees in Spain. Under this article, pensions and other similar remuneration paid in consideration of past employment are taxable only in the country of residence of the recipient. This means:

• Irish state pension (contributory and non-contributory): Taxed in Spain for Spanish residents
• Irish occupational pensions: Taxed in Spain for Spanish residents
• PRSAs and RACs: Taxed in Spain for Spanish residents
• Approved Retirement Funds (ARFs): Taxed in Spain for Spanish residents

Ireland will not withhold tax on these pensions once you provide evidence of your Spanish tax residency (typically a certificate of fiscal residence from the Spanish tax authority, Agencia Tributaria). You declare the full pension income on your Spanish Modelo 100 annual tax return.

Note: Government pensions (Article 19) — paid to individuals for services rendered to the Irish state — are taxed in Ireland, not Spain. This applies to civil service and public sector pensions. The distinction between Article 18 (private/state pensions) and Article 19 (government service pensions) is critical and depends on the nature of the employment, not the payer.

Rental Income — Article 6

Under Article 6, income from immovable property (real estate) is taxable in the country where the property is located. If you own rental property in Ireland while living in Spain:

• Ireland has the primary right to tax the rental income
• You must also declare the income in Spain on your annual tax return
• Spain will provide a credit for the Irish tax paid, preventing double taxation (Article 23)

Conversely, if you own rental property in Spain, the rental income is taxed in Spain. If you are a Spanish resident, it forms part of your general taxable base under IRPF.

Capital Gains — Article 13

Article 13 governs capital gains. The key rules are:

• Gains from immovable property: Taxed in the country where the property is located. If you sell an Irish property while living in Spain, Ireland taxes the gain first, and Spain provides a credit
• Gains from shares or other assets: Generally taxed in the country of residence (Spain, for Spanish residents)
• Business assets: Gains from the sale of assets forming part of a permanent establishment are taxed where the permanent establishment is located

Spanish capital gains tax rates for residents (2026) are: 19% on the first EUR 6,000; 21% on EUR 6,001-50,000; 23% on EUR 50,001-200,000; 27% on EUR 200,001-300,000; and 28% on gains exceeding EUR 300,000.

Dividends — Article 10

Dividends paid from Ireland to a Spanish resident may be subject to Irish withholding tax, but the DTA limits this to 15% (or 5% if the beneficial owner is a company holding at least 25% of the capital). Spain will then provide a credit for the Irish withholding tax against your Spanish tax liability on the same dividends.

In practice, Irish dividends are included in your Spanish savings income (renta del ahorro) and taxed at the progressive savings rates (19%-28%). The Irish withholding tax is credited against the Spanish liability.

Interest — Article 11

Interest arising in Ireland and paid to a Spanish resident may be subject to Irish withholding tax, but the DTA limits this to 10%. Ireland currently applies a 33% DIRT (Deposit Interest Retention Tax) on deposit interest, but this can be reduced under the treaty for Spanish residents. The Spanish tax return includes the gross interest, and a credit is given for Irish tax withheld.

Elimination of Double Taxation — Article 23

Article 23 provides the mechanism for eliminating double taxation. Spain uses the credit method: where income is taxed in both countries, Spain allows a credit against its tax for the amount of tax paid in Ireland on the same income. The credit cannot exceed the amount of Spanish tax attributable to that income.

This means you will never pay more than the higher of the two countries’ tax rates on any given item of income. In most cases, since Spain’s rates are higher than Ireland’s, you will pay the difference to Spain after crediting Irish tax.

Wealth Tax and Modelo 720 Obligations

The DTA does not cover wealth tax, which is a purely Spanish obligation. As a Spanish tax resident, you may be subject to Spain’s Impuesto sobre el Patrimonio (wealth tax) on your worldwide net assets exceeding the exempt threshold. The threshold and rates vary by autonomous community; in Andalucia, the first EUR 700,000 of net assets is exempt (plus EUR 300,000 for your primary residence), with rates from 0.2% to 3.5% on amounts above.

Additionally, Spanish tax residents with assets abroad exceeding EUR 50,000 in any category (bank accounts, securities, real estate) must file Modelo 720 — the informative declaration of overseas assets. This is an information return, not a tax payment, but failure to file carries severe penalties. Irish bank accounts, investment portfolios, and property must all be declared.

Frequently Asked Questions

Reviewed by María Luisa de Castro, CEO at CostaLuz Lawyers — specialist in Spanish & cross-border tax for expats — Updated 2026

This is general information, not definitive legal advice — every case requires individual analysis.