Fernando and Rosa lived in Toronto for thirty-two years. He was a maintenance technician at a car plant; she was an administrative assistant at a hospital. They retired there and on 1 June 2026 they landed in Oviedo to stay. Fernando receives a Canadian pension equivalent to about 22,000 € a year and a Spanish one of 7,200 € for the years he paid contributions before emigrating; until now, the latter was taxed in Spain as a non-resident's pension. In October, a cousin tells him that "in the first year you declare nothing, because you arrived halfway through". It is exactly the other way round.
The year of arrival is not split
IRPF (Spanish personal income tax) is calculated by full calendar years. There is no such thing as being resident from June: either you are resident for the whole of 2026, or you are not resident for any of it. Article 9 of the Spanish income tax act (IRPF) sets the criteria (more than 183 days in Spain in the calendar year, the centre of economic interests here or the family presumption), and meeting one is enough.
Let us count Fernando's days from 1 June to 31 December:
- June: 30 days.
- July and August: 62 days.
- September: 30 days.
- October, November and December: 92 days.
- Total: 30 + 62 + 30 + 92 = 214 days.
That exceeds 183 days. Fernando and Rosa are tax resident in Spain in 2026, and they are so from 1 January, even though they were in Toronto in January. If they had arrived after 1 July, the day count would not reach 184, and residence for 2026 would depend on the other criteria.
What goes into the 2026 return
As residents, they are taxed in Spain on their worldwide income for the whole year. For Fernando, that includes:
| Income | Period | How it enters the Spanish return |
|---|---|---|
| Canadian pension | January to December | According to what the treaty with Canada says for that type of pension |
| Spanish pension | January to December | Employment income under IRPF |
| Interest on Canadian accounts | January to December | Investment income, with a possible credit for tax paid there |
| Sale of assets in Canada, if any in 2026 | Any date in the year | Capital gain under IRPF |
What Canada does with those months (whether it considers Fernando resident until May, whether it taxes him on anything because he left) is Canadian law and his adviser there confirms it. If both countries tax the same income, the treaty applies, and in Spain the double taxation credit in article 80 of the IRPF act, with the limit of the Spanish average effective rate.
Non-resident withholding from January to May is not lost
Until June, the payer of Fernando's Spanish pension withheld tax under non-resident income tax (IRNR), with the pension scale: 8 % up to 12,000 € a year. With 7,200 € a year, that withholding was in the first band.
What happens to that withholding now that Fernando is resident for the whole year? The law resolves it: article 99.8 of the IRPF act treats non-resident income tax withholdings made in the year of the change of residence as payments on account of IRPF, and article 79.d) allows them to be subtracted when calculating the final amount due.
With simple figures, assuming the Spanish pension was paid in twelve equal monthly instalments:
- Monthly pension: 7,200 / 12 = 600 €.
- Months with non-resident withholding: January to May, 5 months. Base: 3,000 €.
- Withholding at 8 %: 240 €.
- In the 2026 return, those 240 € are subtracted as payments on account of IRPF, together with the IRPF withholding the payer makes from June to December.
If the payer of your Spanish pension keeps applying the non-resident scale all year, the withholding may fall short of what results under IRPF, especially once the foreign pension is added. It is advisable to notify it of the change of residence so that it recalculates the withholding: the IRPF regulations provide for that adjustment and for the non-resident withholding already made to be deducted when it is carried out. Whatever is not withheld during the year is paid in one go with the return.
The foreign payer needs to know too
The Canadian body that pays Fernando's pension will go on treating him as resident there until it is shown otherwise. If the treaty gives that pension to Spain, the reasonable outcome is that it stops withholding; if it gives it to Canada, or allows both to tax, the Canadian withholding may be correct. In any case, the document the foreign payer usually asks for is a certificate of tax residence in Spain, issued by the Agencia Tributaria (the Spanish tax agency). Until Fernando is resident for the tax year, it may not be issued with reference to 2026, which calls for planning: the step before the foreign payer follows that country's rules, and there his adviser has the last word. The Spanish certificate is explained in the tax residence certificate.
What to obtain before leaving the other country
Much of the evidence that will be needed in Spain is easier to obtain before leaving:
| Document | What it is used for in Spain |
|---|---|
| Pension certificate with gross amounts from January to May | Declaring the part of the year paid abroad |
| Certificate of tax withheld there | Double taxation credit, if applicable |
| Document proving the origin of each pension | Classifying it correctly under the treaty |
| Balances and values of accounts and investments at the date of departure | Reference for the 720 and for future sales |
| Proof of the date of arrival | Proving the day count |
If you are in Fernando's situation or soon will be, the pensioners form lets you send us the date of arrival, the pensions you receive and who pays them. With that we can work out what withholding to ask each payer for and what will be declared in the first return.
The 720 and wealth tax in the first year
Being resident in 2026, Fernando and Rosa will have to consider whether to file Modelo 720 (the Spanish return on assets held abroad) between 1 January and 31 March 2027 for their accounts, investments or properties in Canada, block by block and with the 50,000 € threshold. And they become liable to Spanish wealth tax on a personal basis, on their assets worldwide, under the rules of the Principality of Asturias. We do not develop this here: the first 720 is explained in I live abroad: does Modelo 720 affect me?, and preparing the return well in advance in what happens for tax in the year I return to Spain.
If the foreign pension is a public-service pension
Rosa worked at a public hospital. If her Canadian pension rewards services rendered to a public administration, the treaty may reserve its taxation to Canada, unless she also holds Spanish nationality and lives here, which is the case in which the model moves it to the country of residence. Rosa is Spanish: in her case, precisely, that exception might apply. It is a good example of why a couple's pensions are analysed one by one. The detail is in public or private pension.
The first return after coming back, with the foreign pension for the full year and the use of the non-resident withholding, is one of the situations Salama Tax describes for retirees who return to Spain after years abroad.