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Spain no longer taxation loophole for Finnish pensioners after 2020

Xinhua, December 16, 2015 Adjust font size:

Finland and Spain on Tuesday reached an agreement that allows the Nordic country to tax pensions of its emigrants who move to Spain.

So far, Finland has only been able to levy tax on pensions of people who have worked in the public sector of Finland, but pensions of former private sector employees cannot be taxed when they have moved to Spain.

If approved by both countries' parliaments, the agreement will end the history that Spain serves as an option to avoid Finnish taxation.

The outgoing agreement dates back to 1967. Finland and Spain tried to renegotiate it in 1990s, but an agreement seemed negotiable only when the talks resumed in 2013.

Senior government counsellor Antero Toivainen told Finnish national broadcaster Yle that new policies would take effect in 2020 after a transition period of three years.

Counsellor Toiviainen said he hopes that the agreement with Spain will also improve chances of getting an understanding with Portugal.

Currently Portugal is giving wide tax privileges for pensioners moving into the country. Although the number of pensioners moving from Finland to Portugal is smaller compared with those choosing Spain, the emigration to Portugal has got much publicity in Finland this year due to the fact some high end pensioners -- with millions paid in pensions each year -- have chosen Portugal. Endit