Question
Is military retirement taxed in Spain? I am planning to live in Spain within a few years.
Answers
These are the answers of Spainguru’s Facebook group members:
“No. Military retirement and disability is non-taxable.
There are also several ‘gotchas’ if you’re planning to use the military base at Rota:
1. Commissary Access
No commissary access for retirees—this is non-negotiable. You can’t buy anything at the main NEX unless it’s red tag clearance. However, you can use the “buy online, pick up in store” workaround for other items. Retirees do have full access to the Mini Mart (shoppette), where you can buy oil, ATF, wax, etc., but not fuel.
2. Base Access Passes
You only get a one-year base access pass—and only if you live in the Cádiz province. Everyone else must request a day pass each time they visit.
3. Healthcare at Navy Hospital Rota
The hospital is space-available only for retirees. There is no Tricare Prime, only Overseas Select or VA FMP. It’s highly recommended to purchase Spanish health insurance, especially if you’re relying on consistent care. The pharmacy is available for use, but you must pay upfront and get reimbursed through your insurance.
4. Overseas PO Box
You’ll get an overseas PO box, but it’s limited to 1lb shipping in and out. While limiting, it’s still great for U.S. banking and receiving credit cards. Items related to Tricare/medical needs are exempt from this 1lb restriction. Amazon USA’s interpretation of “1lb” can also work in your favor.
5. Banking & Bill Payment Tips
There’s a Navy Federal Credit Union branch on base, which is excellent for U.S.-based banking. I also recommend opening an Andrews Federal Credit Union account before leaving the U.S.—they offer a EuroPay feature that works through their app or website. You can add a Spanish bank (e.g., BBVA on base) as a payee and make no-fee USD-to-EUR transfers or pay Spanish bills directly from your U.S. account.
Bonus tip: the NEX customer service desk has a portal for paying rent and utilities—and you can pay with a credit card. I rack up lots of Amex points by using the Blue Business Plus card (2x points on all purchases) for those payments.
6. ATM Access
I use Charles Schwab checking, which refunds all ATM fees—highly recommended for withdrawing cash in Spain.”
“Your US Military (or other governmental employment service pension, such as teacher’s pension) is not taxed in Spain (unless you are also a Spanish citizen), BUT the amount is included in calculating the incremental tax rate on any other income (such as Social Security or private pension). Be aware that you do have to file the Spanish income tax form.
I haven’t seen definitive info about a US disability pension, but on other FB posts, readers confirmed they are tax exempt also. You might want to download and save the US-Spain Tax Treaty from the IRS web site. Note the treaty allows income records to be exchanged between the two countries, so use the same figures.”
“Generally speaking US Military pensions are not taxed unless you are a Spanish citizen. US military pensions are usually included when calculating your tax bracket, however. If you like, join US Military Retirees in Spain for information specific to military retirees. You have many benefits from being a retiree that a general group like this won’t be knowledgeable about.”
“They’re not taxed now, we don’t know about the future.”
“No, I say this as a retired vet currently living in Spain.”
“No, unlike the US, service pensions are not taxed in Spain. I am still uncertain if my Teacher pension is still taxed in the US even though I live in Spain. I think there is an exemption up to a certain amount as a tax resident in Spain. Social Security is taxed in Spain.”
“Your government-paid teacher’s pension from the US isn’t taxed in Spain (unless you are a Spanish citizen), but the amount is included in calculating your incremental tax rate for other income.”
“No, as long as you are not (also) a citizen of Spain.”
“All worldwide income must be declared, but it doesn’t necessarily mean you will be taxed on it. Generally, military pensions are taxed at source, ensuring that you won’t be taxed on the same income twice. However, if your total income exceeds the tax threshold, you may still incur tax liability.
Typically, with various allowances, you won’t be taxed on income over €14,000. Additionally, any tax already paid will be accounted for in your tax return. Those who are older, have disabilities, or support families may be eligible for higher allowances, making Spain’s tax system quite favorable.”
“No! Think of moving to Rota, Spain. I’m an Army retiree and use the Navy base hospital, gym and many other perks. Plus, retirees get a FPO.”
“That is correct you can use the pharmacy at the hospital. They will bill your insurance.”
“When you get your NLV, you must purchase Spanish health insurance before coming over, but that is only for the 1st year. After that, for your NLV renewals, you do not need Spanish health insurance. We haven’t had it since the 1st year and we have had great care at the hospital.”
“It all depends if you combine it with other income such as social security, dividends, sold stocks, 401k, or a spouse’s income. By itself, you’re fine but that’s not the normal. I’m retired military and live in Europe. If it was taxed in the states, it’ll be the same over here.”
“No.”
“No.”
“As a resident no, but if you become a citizen then yes.”
“Government pensions are not taxed in Spain! They’re called ‘pensiones públicas’.”
Conclusion
Based on the detailed responses from the Spainguru community, U.S. military retirement pay is not taxed in Spain—as long as the retiree is not also a Spanish citizen.
However, this income is included when calculating your overall tax bracket, which could affect taxation on other income sources like Social Security, dividends, or private pensions.
Retired veterans planning to live near Rota also shared valuable insights about base access, healthcare options, commissary limitations, and banking workarounds.
While access to on-base facilities is somewhat restricted, retirees can still use the pharmacy and access care on a space-available basis.
Many also noted that Spanish health insurance is mandatory only for the first year under the Non-Lucrative Visa (NLV), and that a combination of U.S. and local resources makes life in Spain very affordable and enjoyable.
You can get NLV compliant health insurance here.
For those combining military pensions with other forms of income, it’s important to review how the total income might affect your Spanish tax rate and consult the U.S.-Spain tax treaty. While current rules exempt military pensions from taxation, the future is uncertain, and periodic review of residency laws is advisable.
