Updated : 12/2012
There is no EU-wide law that says how people who move from one EU country to another should be taxed — there are only national laws and bilateral tax treaties between countries.
The tax treaties vary considerably and do not address all eventualities. For example, income and capital taxes are usually within their scope but few of them deal with inheritance taxes.
However, there are some basic principles that apply in most cases to people who spend time in EU countries outside their home country. These are given below.
If you spend more than 6 months a year in another EU country, you might be considered as a tax resident there. If so, you may have to pay tax to that country on your total income worldwide — on your pension and on other income from any source within or outside that country.
If you spend less than 6 months a year in another country, only the income generated there (such as a pension) would normally be taxed there, as you would continue to be a tax resident in your home country — or the country where you normally live.
Exception: public sector pensions are usually taxed only in the country of the administration that employed you.
This is only a summary of what usually happens. There could be exceptions to the general rule in some countries. Also, each country has its own rules on tax residence. Your specific circumstances should always be taken into account.
You can ask your tax office or a European employment adviser.
Before you move abroad, get personalised advice and some information on income tax in the country you want to move to.
If in a given EU country taxes are higher for non-resident taxpayers, it could be in breach of EU law. If you feel discriminated against, you can seek personalised advice.
Check which country will be your tax residence, particularly if you split your time between several countries. Some countries have a first/second residence system. Find out about tax rates and deductions too. You can ask the tax office or a European employment adviser.
Information on income tax, contact details for tax authorities and definitions of resident for tax purposes per country:
For information on other taxes in the country where you are now living, consult the local tax offices.
If you are thinking of buying a retirement property abroad, find out about inheritance tax first.
Inheritance tax systems vary widely across Europe and the risk of being taxed in two countries without any remedy for this double taxation is still extremely high.
If you need additional information, contact the tax office in your new country.
Alison and Simon from the UK bought a house in France and retired there. France charges inheritance tax on properties there, so when Alison died, Simon had to sell their house to pay French inheritance tax, which was 50% of the house’s value.
What's more, Simon may also have to pay UK inheritance tax on the property as Alison was domiciled in the UK — though the total amount of inheritance tax payable in the two countries may be reduced thanks to the inheritance tax agreement between the UK and France. Alison and Simon should have sought information on French inheritance tax before buying their house.
If you retire abroad and are considered a tax resident in your new country, you should be taxed in the same way as nationals of that country.
As a non-national resident, you should normally be given the same tax deductions as nationals of the country. And, subject to certain conditions, any social insurance contributions you pay in your country of origin should be tax deductible in your new country of residence. If you feel discriminated against, you can seek personalised advice.