{"id":31366,"date":"2026-04-29T08:23:02","date_gmt":"2026-04-29T08:23:02","guid":{"rendered":"https:\/\/artus.at\/?p=31366"},"modified":"2026-04-29T08:23:02","modified_gmt":"2026-04-29T08:23:02","slug":"taxation-of-pensions-from-abroad","status":"publish","type":"post","link":"https:\/\/artus.at\/en\/blog\/taxation-of-pensions-from-abroad\/","title":{"rendered":"Taxation of Pensions from Abroad\u00a0"},"content":{"rendered":"

Individuals who have their residence or habitual abode in Austria are subject to unlimited tax liability and must therefore declare and tax their entire worldwide income in Austria. If taxpayers receive a pension from a country other than the one in which they are resident, the question arises as to whether\u2014and in which\u00a0country\u2014such pension income is taxable. To clarify this, a three-step assessment model is applied:<\/span>\u00a0<\/span><\/p>\n

    \n
  1. Is the pension taxable under Austrian domestic tax law?<\/span><\/li>\n
  2. Does a double taxation agreement (DTA) restrict Austria\u2019s right to tax?<\/span>\u00a0<\/span><\/li>\n
  3. Levying of tax if subject to taxation in Austria<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

    A domestic\u00a0tax liability may arise\u00a0on the basis of\u00a0the following provisions:<\/span>\u00a0<\/span><\/p>\n

    First Pillar: Statutory Pensions\u00a0pursuant to\u00a0section 25 of the Austrian Income Tax Act (EStG)\u00a0<\/span><\/h3>\n

    This category includes pensions from state pension systems (e.g.\u00a0social security). Such pensions qualify as income from employment. Where the pension contributions were tax deductible, the\u00a0subsequent\u00a0pension payments are taxable\u2014this also applies to foreign statutory pensions.\u00a0As a general rule, all contributions to statutory domestic and foreign pension schemes are tax deductible.<\/span>\u00a0<\/span><\/p>\n

    Second Pillar: Occupational Pensions\u00a0pursuant to\u00a0section 25\u00a0EStG\u00a0<\/span><\/h3>\n

    Pension payments from a foreign (occupational) pension fund may also\u00a0constitute\u00a0income\u00a0pursuant to\u00a0section 25\u00a0EStG, even if the contributions were not based on a statutory obligation but were made by the employer or employee\u00a0on the basis of\u00a0employment contracts or on a voluntary basis. If the contributions paid in the past into the foreign pension fund were not tax deductible, only 25% of the pension benefits attributable to contributions borne by the employee (i.e.\u00a0the future pension recipient) are subject to taxation in Austria upon payout.<\/span>\u00a0<\/span><\/p>\n

    Third Pillar: Private Pension Provision\u00a0<\/span><\/h3>\n

    Where contributions to private pension or retirement savings schemes were made on a voluntary basis, the\u00a0subsequent\u00a0pension payments qualify as so-called recurring income within the meaning of section 29\u00a0EStG. As these contributions were made from already taxed income, the pension payments are only taxable to the extent that they exceed the value of the originally paid-in contributions. In other words, only the profit\u00a0component\u00a0is subject to taxation.<\/span>\u00a0<\/span><\/p>\n

    Treaty Treatment of Foreign Pensions\u00a0<\/span><\/h3>\n

    In a second step, it must be examined whether a DTA limits Austria\u2019s taxing rights. Many DTAs are based on the OECD Model Tax Convention, which primarily governs the taxation of pensions in Articles 18, 19 and 21.<\/span>\u00a0<\/span><\/p>\n