Is a foreign pension taxable? Where you live decides
Yes, almost always somewhere. 24 of the 45 countries in the Nomad Tax Index tax residents on worldwide income, so a pension paid from abroad lands in the same return as everything else, and the country that pays it often withholds tax before the money reaches you.
Pensions follow the same residence logic as the rest of digital nomad taxes, and a tax treaty settles the clash between the 2 countries. Under the OECD Model Tax Convention, the template most treaties follow, a pension paid for past private employment is taxable only in the country where the pensioner lives (Article 18). The paying country gives up its claim entirely.
That makes pensions unusual among income paid across borders. Rent stays taxable where the property sits (Article 6), so foreign rental income tax is still paid there after you leave. A dividend can still bear dividend withholding tax of up to 15% in the company's country under Article 10(2) of the OECD Model, while a private pension under Article 18 leaves the paying country nothing.
Before a move, sort each pension by type, read the treaty article for that type, then check what the new country charges under its own law. The country where you are tax resident on the day each payment arrives is the one that matters.
Private, government and state pensions: which country taxes each
Treaties do not treat every pension alike. The UK-US treaty gives each type its own paragraph, and other treaties differ most on state pensions and lump sums.
Who may tax each kind of pension under the UK-US treaty, checked October 12, 2026
| Kind of pension | Who may tax it | What it means after a move |
|---|---|---|
| Workplace or personal pension, paid regularly | Only the country where you live (Article 17(1)(a), the same rule as OECD Model Article 18) | Claim treaty relief so the paying country stops withholding |
| Government service pension (civil service and other public employers) | Only the paying country, unless you are both a resident and a national of the other country (Article 19(2)) | Moving abroad does not change the tax on it |
| State pension or other social security benefit | Only the country where you live (Article 17(3)) | This is the UK-US rule; other treaties differ, and with no treaty the paying country's own law applies |
| Lump sum from a pension scheme | Only the country where the scheme was set up (Article 17(2)) | A lump sum taken after the move can stay taxed at home |
| Annuity bought for full consideration | Only the country where you live (Article 17(4)) | Treated like a private pension |
A government pension stays taxed where it is paid. HMRC says most UK government pensions, such as civil service pensions, are taxed only in the UK, so a retired civil servant who moves to a country with no income tax keeps paying UK tax on that pension. The UK-US exception is narrow: the pension moves to the US only for someone who is both resident in the US and a US national.
State pensions abroad: the UK, US and Canadian rules
The UK State Pension drops out of UK tax once you leave: non-residents do not usually pay UK tax on it. A UK workplace or personal pension is different: pensions are on the list of UK income that non-residents usually still pay UK tax on, until you claim relief under a treaty.
The US keeps a share of Social Security paid to people who are neither US citizens nor US residents. IRS Publication 915 taxes 85% of the benefit at 30%, which takes 25.5% of every payment, unless a treaty exempts it or sets a lower rate. Residents of 9 countries pay nothing to the US (Canada, Egypt, Germany, Ireland, Israel, Italy, Japan, Romania and the United Kingdom), and residents of Switzerland pay 15% of the whole benefit (IRS).
| Living in the UK, Germany or CanadaExempt by treaty | $0 withheld |
|---|---|
| Living in Switzerland15% of the whole benefit | $300 withheld |
| Living in the UAE, which is not on the IRS treaty list30% on 85% of the benefit | $510 withheld |
From IRS Publication 915, read October 12, 2026. Green card holders count as US residents, so this withholding does not apply to them.
Canada withholds at source too. The CRA charges Part XIII tax at 25% on pensions, Old Age Security, Canada and Quebec Pension Plan benefits and annuities paid to non-residents, unless a treaty lowers the rate, and the tax withheld is usually your final Canadian tax on that income. For some pension income, people leaving Canada can elect under section 217 to file a return and get back part or all of it.
Pension lump sums: tax-free at home is not tax-free everywhere
A lump sum is where a move can cost the most, because the home country's tax-free share does not travel with you. In the UK you can usually take up to 25% of a pension tax-free, capped at £268,275 (about $356,000) unless you hold a protected allowance (GOV.UK). That is a UK relief: where a treaty gives the lump sum to your new country, its own law decides whether any of it is tax-free.
Some treaties keep lump sums with the paying country. The UK-US treaty makes a lump sum from a pension scheme taxable only in the country where the scheme was set up (Article 17(2)), but its saving clause lets each country keep taxing its own residents, and the US its citizens, as if the treaty had not come into effect, except under listed articles (UK-US treaty, Article 1(4) and (5)). A lump sum across that border needs both clauses read before it is paid.
Canada taxes withdrawals from retirement savings the same way it taxes pensions: RRSP and RRIF payments to a non-resident bear Part XIII tax at 25% unless a treaty lowers it (CRA). At the other end, Cyprus exempts lump sums paid from Cyprus or EU approved funds and lump sums from a pension conversion (PwC).
Foreign pension tax by country: 9 destinations compared
Once the treaty hands the pension to your new country, its own law sets the rate, and the spread is wide. The ordinary scales in the chart are shown at their top rates, which reach only the top slice of a large pension: Portugal's 48% starts above €86,634 (about $98,600) of taxable income (CIRS Article 68).
Source: Portugal: CIRS Article 68. Italy: TUIR Articles 11 and 24-ter. UAE: Cabinet Decision No. 49 of 2023 and PwC. Greece and Cyprus: PwC Worldwide Tax Summaries, as in the Index. All listed under Sources Cyprus charges 5% only on foreign pension income above €5,000 (about $5,690) a year and lets you choose the ordinary scale instead; Italy's ordinary scale carries regional and municipal surcharges on top.
Show the numbers
| Top rate | |
|---|---|
| Portugal, ordinary scale | 48% |
| Greece, ordinary scale | 44% |
| Italy, ordinary scale | 43% |
| Greece, 7% pensioner regime | 7% |
| Italy, 7% regime in the south | 7% |
| Cyprus, foreign pensions | 5% |
| United Arab Emirates | 0% |
Greece and Italy offer their 7% rates as incentives aimed at new residents, so both require years of non-residence first, and both tax all foreign income at the flat rate, not only the pension. The table adds the countries that leave a foreign pension untaxed, and the conditions that decide whether a rate reaches you.
How 9 countries tax a foreign pension for a new resident, checked October 12, 2026
| Country | Foreign pension | Conditions and catches |
|---|---|---|
| Greece's pensioner regime | 7% flat on all foreign income (PwC), for up to 15 years (EY, August 5, 2020) | Not Greek tax resident in 5 of the previous 6 years; moving from a country with an administrative cooperation agreement with Greece |
| Italy's 7% regime | 7% flat on all foreign income, for the year of the move and the next 9 (TUIR Article 24-ter) | A pension paid from abroad; not Italian resident in the previous 5 tax years; moving from a country with an administrative cooperation agreement (Article 24-ter(2)); a town of up to 30,000 people in Sicily, Calabria, Sardinia, Campania, Basilicata, Abruzzo, Molise or Puglia, or a listed earthquake area |
| Cyprus pension tax | 5% on foreign pension income above €5,000 (about $5,690) a year; the threshold was €3,420 until December 31, 2025 (PwC) | You can choose the ordinary scale instead, year by year |
| Portugal's ordinary scale | Ordinary scale, 12.5% to 48% (CIRS Article 68) | The IFICI regime's foreign income exemption covers work, investment and other income but not pensions (CIRS Article 81(4)) |
| Thailand's remittance rule | Taxed at the normal rates only when brought into Thailand | Applies to a tax resident (180 days or more in the tax year) and covers foreign income earned from January 1, 2024; a pension left abroad is not taxed (Revenue Department) |
| Panama's territorial tax | Not taxed | Only income produced in Panama is taxed: foreign-source income comes off the return under Fiscal Code article 694 (DGI) |
| Philippine tax for foreigners | Not taxed for foreign nationals | Foreigners are taxed only on Philippine-source income, while Filipino citizens who live there are taxed on worldwide income (Tax Code section 23) |
| Dominican Republic pensioner residence | Exempt (Law 171-07, article 10) | Covers the pension declared to qualify for pensioner residence; work done in the country stays taxable (article 15) |
| United Arab Emirates | Not taxed: no personal income tax (PwC) | The paying country can still withhold, as the US does on Social Security |
| Cyprus, 5% above €5,000 | €1,250 (about $1,420) |
|---|---|
| Greece, 7% pensioner regime | €2,100 (about $2,390) |
| Italy, 7% regime in a qualifying southern town | €2,100 (about $2,390) |
| Panama or the UAEBefore anything the paying country withholds | €0 |
Rates from PwC Cyprus, PwC Greece and TUIR Article 24-ter, read October 12, 2026.
Qualifying for Greece's 7% pensioner regime
Qualifies
A German retiree who has never lived in Greece moves to Crete in 2027 with a €45,000 (about $51,200) company pension. She was not Greek tax resident in any of the previous 6 years and moves from an EU country, so she opts in and pays 7%, €3,150 (about $3,580) a year, on all her foreign income (PwC).
Fails the look-back
A retiree who worked in Athens from 2022 to 2024 moves back in 2027. He was Greek tax resident in 3 of the previous 6 years, so he misses the 5-of-6 rule, and his pension goes on the ordinary scale, which reaches 44% at the top (PwC).
US citizens: foreign pensions stay taxable in the US
For US expats the move changes less. The US taxes citizens on worldwide income wherever they live (IRS), and its treaties keep that right through the saving clause: the UK-US treaty lets the US tax its citizens as if the treaty had not come into effect, except under listed articles.
The social security rule is one of those exceptions, so a US citizen living in the UK pays tax on US Social Security only in the UK (UK-US treaty, Articles 1(5) and 17(3)). Without such a rule, up to 85% of Social Security can be taxable for US citizens and residents (IRS Publication 915).
The foreign earned income exclusion does not help with any of it: the IRS lists pension and annuity payments, Social Security included, among amounts that are not foreign earned income. Tax your new country charges on the pension can count toward the foreign tax credit instead.
Moving abroad with a pension: the steps in order
UK pensions show how treaty relief works in practice. You send the claim through the tax authority of your new country, which confirms you are resident there and either forwards it to HMRC or returns it to you to send on; depending on the treaty, you get relief before tax is deducted or a refund afterwards (GOV.UK).
Residents of the US, France, Germany, Canada and Australia, among others, use their own country's form, and everyone else uses HMRC's standard form. The confirmation the new authority gives is the same evidence a tax residency certificate provides, so ask for it as soon as your residence starts.
Before you move with a pension
- List every pension by type: workplace, personal, government, state, and any lump sum you plan to take.
- Find the treaty between each paying country and your new country, and read its pension, government service and social security articles.
- Check the look-back before you arrive: Greece's regime needs 5 non-resident years out of the previous 6, Italy's the previous 5 tax years, and both need you to move from a country with an administrative cooperation agreement.
- Decide whether any lump sum comes before or after the move, once you know which country's rules reach it.
- Have your new tax authority certify your residence on the paying country's relief form, and send it before the first payment.
- Give each pension payer your new address and residence, and keep the statements showing tax withheld for your first return in the new country.
David's note
I would work out where each pension is taxed before choosing the country, not after. A 7% regime looks decisive until the largest pension turns out to be a government one the paying country keeps taxing, so I price a move only on the pensions the treaty actually hands over.
