WRITTEN QUESTION No. 3228/98 by Karin RIIS-JØRGENSEN to the Commission. Taxation of pensioners
Date: 1998-10-26
Institutions: European Parliament, RIIS-JOERGENSEN
Subjects: free movement of persons, freedom to provide services, pension scheme, residence, retired person, tax, tax law, tax system

C 207/42

Official Journal of the European Communities

EN

21.7.1999

that the Commission finds ways of supporting the fresh opportunities which the Northern Ireland peace
agreement brings and would answer Parliament’s request to consider as a matter of urgency how the peace
agreement can be supported in practical terms. It would also comply with the orientations of the 1999 draft
budget, that an additional ECU 100 million for the peace initiative should be provided by reprogramming the
other Community initiatives and meet Parliament’s request to make reallocations within the Community
initiatives to ensure their appropriate financial implementation.

The modifications to the indicative allocations will be made by amending the Commission decisions of 13 July
1994 and 8 May 1996 which established, respectively, the original indicative allocation to the Community
initiatives and the distribution of the Community initiative financial reserve.

(1999/C 207/055)

WRITTEN QUESTION E-3228/98

by Karin Riis-Jørgensen (ELDR) to the Commission

(26 October 1998)

Subject: Taxation of pensioners

In which country should tax be paid on pensions? The country which pays the pension, or the country of
residence?

Denmark for instance has terminated its double taxation agreement with Portugal, which means that Danish
pensioners in Portugal now have to pay tax in Denmark on their Danish pensions, whereas Danish pensioners
in Spain still pay tax on their Danish pensions in Spain.

Does the Commission consider it right that a country should treat pensioners who live abroad differently when
it comes to paying tax?

Are there guidelines for the taxation of pensioners living abroad? If so, what are they?

Answer given by Mr Monti on behalf of the Commission

(3 February 1999)

There is no Community legislation governing the right to tax pension income. Most bilateral taxation treaties
however include such provisions, drafted often on the lines of Article 18 of the Organisation for economic
cooperation and development (OECD) model tax convention on income and on capital which attributes the
right to tax to the country of residence. If no bilateral treaty is concluded, both countries have, in principle, the
right to tax. It is up to their national legislation to ensure that double taxation is avoided.

If a situation of effective double taxation occurred, the compatibility of such double taxation with the basic
freedoms guaranteed by the EC Treaty would need to be examined. However, in the absence of harmonising or
co-ordinating Community rules, the simple fact that pensioners who have moved abroad to different Member
States are subject to a different tax burden does not constitute a violation of the Treaty.

The Commission wishes to draw the Honourable Member’s attention to its current work to remove those
obstacles to the free movement of workers and also to the free provision of financial services which stem from
the complex and varying tax treatment of supplementary pensions and life insurance across the Community
and insufficient co-ordination of taxation policies in this area.