If you’ve spent any time away from your desk this summer on a Spanish beach, in a city such as London or in the Italian countryside, you may wonder about the practicality of making such a move permanent.
But making sure you have the finances to pay for all those spritzes and oysters can give pause for thought. Ensuring the location of your dreams is tax efficient is one way you can protect your money and make your funds go further.
Here, we take a look at how some of the more popular locations tax Irish people, whether you are moving just for a change of scene or for a retirement in the sun, with the help of a new report from Goodbody.
Dreaming of moving and actually making the leap can be somewhat different, says Catriona Coady, head of tax with Goodbody. She senses a “greater desire” among Irish people to make such a change, perhaps spurred by a financial event such as the sale of a business, an inheritance, a redundancy package or a retirement lump sum.
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Climate can also be a driver, she says, “but reality might be something different”.
People might imagine they can just board a plane and head off to their new life where tax rates might be lower, but residency rules, taxes and double taxation agreements can all conspire to make a move abroad a complex endeavour.
“It’s really about looking at the benefits of each country, and looking at your family situation, and whether the tax rules are a ‘nice to have’ on top of what you’re planning to do,” she says, adding that deciding on the basis of tax alone can be the “most difficult or unhappy way to make the decision”.
You may not want to become “a hostage to the tax residence rules” if you still have family in Ireland, or are looking to access healthcare here. In Spain, for example, you’ll need to spend 183 days there in a year to be resident.
There is also the question of what pension vehicle you are in, and how this will be treated in your new home country.
If it’s in an approved retirement fund (ARF) for example – increasingly the most popular option for private sector workers – will this be treated as pension or investment income? And if you transfer your pension before you draw it down in a new host country, is this being done for reasons that won’t be considered as tax avoidance? What double taxation rules will apply?
And then there is the Irish side to consider. You might need to get a PAYE exclusion order to ensure no tax is paid on this side in this jurisdiction.
“There is quite a complex set of rules around identifying what the underlying breakdown of returns in the ARF are, in order to be able to apply the double tax relief,” says Coady. “It’s not as straightforward as it was in the past.”
Restrictions also apply to public sector pensions.
And being no longer tax resident in Ireland “doesn’t happen overnight”, advises Coady, so there may be some time where you face double taxation.
There can be uncertainty also, although there are some protections. “Generally, like we’ve seen with the Portuguese and Italian regimes (which changed in recent years), you are grandfathered,” she says, though she warns there is always a risk that tax rules change.
So while a flat rate tax of just 5 per cent, which is available in Cyprus, might be undoubtedly attractive, the advice is not to base your decision purely on tax grounds.
The UK
Since April 2025, the UK regime has become more attractive. This is because the UK will not tax your foreign income or gains for the first four years of tax residence.
This can make things less complicated if you’re looking to draw down your pension, as double taxation rules won’t apply. It also makes the UK attractive for business owners looking to realise a gain or to receive dividends from their non-UK business, says Coady.
However, as it applies for only four years, you will need to plan for what happens after that point.
Spain
In Spain, there is a special tax regime for people moving to the country, which might apply to you. Known as the Beckham law – as it was used to encourage the footballer to play in Spain – it is aimed at employees, remote workers, directors and entrepreneurs. It means that if you move your residence to Spain, under certain circumstances, you can be taxed as a non-resident. If you qualify, income of up to €600,000 is taxed at a rate of 24 per cent; above that a rate of 47 per cent applies.
This special tax regime may also be extended to close family members.
Another incentive might be available if you move to Madrid. The Mbappé Law – yes, it’s named after the French footballer as its introduction coincided with his move to Real Madrid – provides for a 20 per cent deduction on the portion of personal income tax levied in the region for new residents. It is aimed at attracting foreign investors and talent to live in the region.
On the other hand, you might find yourself dealing with wealth tax. It applies if worldwide assets (for residents) or Spanish assets (for non-residents) are worth more than €700,000. And there is also an annual property tax.
“The devil is in the detail as to whether or not you’ll get any exemptions from those by virtue of being eligible for the Beckham law,” says Coady.
When it comes to retirement income, however, no specific relief applies. According to Coady, foreign pensions are generally subject to tax in Spain, once you are resident.
France
You might dream of lavender fields in Aix-en-Provence, or a stroll through the Tuileries Gardens in Paris, but a move to France likely won’t be for tax reasons. According to Goodbody, you will typically be taxed the same as other residents – and income tax rates can be high.
You may or may not be subject to wealth tax, however. It applies to those with worldwide real estate assets worth more than €1.3 million. You can also expect property taxes and a complicated inheritance tax regime.
And there are no specific incentives for retirees, so you will pay French tax on your pension.
Cyprus
If you move to Cyprus – and even if you subsequently become resident – you will be exempt from tax on dividend and interest income. Moreover, no capital gains tax applies on gains from the disposal of investments listed on a recognised stock exchange – and this regime lasts for up to 17 years. In addition, there are no wealth or gift/inheritance taxes in Cyprus.
The island country remains an attractive location for retirees – and not just for its 300-340 days of sunshine and average house prices of about €300,000. First off, any lump sum received as a retirement gratuity is exempt from tax. In addition, once you’re resident, and you receive pension income “from services rendered abroad”, you can choose to be taxed at a flat rate of 5 per cent on amounts exceeding €5,000 a year.
Italy
Dreaming of skiing in Cortina in the winter, and lying by the pool in Tuscany in the summer? Well, Italy does offer a special incentive for those moving to work there. However, it is only for high net worth individuals, as it equates to a flat tax of €300,000 per year on foreign-source income. The regime can apply for up to 15 years.
As Coady points out, it has become less attractive of late; until 2024 the flat tax stood at €100,000, but is now €300,000.
If you’re moving to retire, a special regime may apply – a flat 7 per cent rate of tax on non-Italian pension income. This “regime for retirees” is only available in southern regions of Italy (Sicily, Calabria, Basilicata, Sardinia, Campania, Abruzzo, Molise and Puglia) and in a town with no more than 30,000 inhabitants. It applies for up to 10 years. Maybe you could combine it with the country’s “house for €1″ programme?
Monaco
It’s the home of star athletes as well as Irish millionaires including Michael Smurfit, and its popularity is obvious. You won’t pay income tax, capital gains tax or wealth tax. But the challenge is to meet the requirements of a Monegasque residency – as well as its high cost of living.
Portugal
In previous years, under the old non-habitual resident regime, Portugal was a very attractive location for those looking for a tax-efficient retirement. If you successfully moved your Irish pension, you could avail of a 10 per cent flat rate of tax on your retirement income – a lot more attractive than the up to 52 per cent you might face in Ireland.
However, this has now come to an end and you’ll face tax at rates ranging from 13 per cent up to 48 per cent.
“It’s definitely less attractive,” says Coady. However, for those looking to move without bringing their pension with them, a flat 20 per cent rate on local income applies to jobs in the approved research, tech innovation and start-up sectors.
