June 30, 2015: Deadline for disclosing US pensions without incurring penalties

Dec 1, 2014 | AEAT, IRPF Spanish Tax Return | 0 comments

If you know of any Spaniards or Americans living in Spain who receive a pension from the United States, whether public or private, or social security benefits which have not been declared annually on the Spanish Income Tax (IRPF), suggest that they file an amended declaration for the last 3 years. If they file before June 30, 2015, no penalties, surcharges or interest will be charged.

Amnesty from the Spanish Tax Agency for recipients of US pensions.

Many residents in Spain receive a private, public or US Social Security pension for work in the past, in addition to the pension received in Spain. Until recently, the Spanish Tax Authorities (AEAT) did not have this information. Therefore, many residents did not declare that second pension and/or the pensions from abroad. Now, both administrations and Social Security have exchanged data and have begun checking Income Tax. As a result of these checks, Hacienda has detected many taxpayers in this situation– most of them elderly.

Residents in Spain are required to submit the Spanish Income Tax in Spain with their worldwide income.

–       US private pensions are always taxed in Spain.

–       The Social Security pension US (SSA-1099) is taxed in the United States and Spain generating the right to a deduction to avoid double taxation.

–       US public pension: If the beneficiary has Spanish nationality it is taxed in Spain and if the beneficiary does not have Spanish nationality it is taxed in the United States and exempt in Spain but must be reported in the Spanish Income Tax to increase the tax rate for the rest of the income.

In order to avoid penalizing all those who had not reported in the past, the Spanish tax authorities have established an Amnesty program, in effect until June 30, 2015, in the following cases:

–       Pensioners who have not declared their pensions from abroad may submit an amended income tax of non-prescribed fiscal years (2010, 2011, 2012 and 2013) between January 1 and June 30, 2015.

–       If you disclose the foreign pensions, the tax Authorities (AEAT) will not impose any penalties, charge interest or surcharges, despite presenting these statements after the legal deadline.

There are many pensioners in this situation who did not file the Income Tax Return in Spain believing they were exempt, since the worldwide income was under the 22,000€ limit. But now, if the aggregate amount of all income– including foreign pensions– exceeds 11,200€, it is required to submit income tax, although the foreign pension is less than 1,500€.

If the Spanish AEAT has already checked a filed income tax return, and discovered the non-reporting of foreign pensions, with the resulting fines and penalties, these taxpayers will also be able to join the Amnesty program, claiming the refund of any interest and/or penalties.


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