10 Countries That Don’t Tax Military Pensions for Expats
Living overseas doesn’t have to mean handing over a chunk of your hard-earned pension. Some countries make retirement surprisingly tax-friendly, especially for veterans. The key is knowing which places won’t significantly dip into your benefits. These 10 spots have carved out reputations as solid choices for retirees who want to keep more of what they’ve earned and enjoy life abroad while they’re at it.
Panama Lets You Keep Every Cent
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Panama doesn’t tax foreign income, so your U.S. pension stays untouched. Better yet, the Pensionado visa is built for retirees. You’ll receive perks such as healthcare discounts and discounted airline tickets. It also helps that Panama uses the U.S. dollar.
Costa Rica Keeps It Simple and Tax-Free
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Costa Rica’s territorial tax system is straightforward: if the money comes from outside the country, it’s not taxed. With the Pensionado residency program, a monthly pension of only $1,000 is required to qualify. The laid-back lifestyle and world-class healthcare are part of the draw, but for many, it’s the ease of keeping their pension whole that seals the deal.
Malaysia Exempts Foreign Income Under Its Current Rules
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Malaysia mainly taxes income earned inside the country. Foreign-source income, including pensions, can qualify for a government-approved exemption framework that runs through 2036, provided it is remitted into Malaysia under specific conditions. The Malaysia My Second Home program remains a popular long-stay option, now operating with tiered financial and deposit requirements.
Ecuador Leaves U.S. Pensions Largely Untouched
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Ecuador follows a largely territorial-style tax system. In practice, foreign pensions and U.S. Social Security benefits are typically not taxed locally, whereas income earned within Ecuador is subject to progressive tax rates. The country also uses the U.S. dollar as its official currency.
Uruguay Uses a Territorial Tax System
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Uruguay generally taxes only Uruguayan-source income. Foreign pensions are typically exempt from local taxation. Montevideo offers European-style urban living, while coastal towns provide slower-paced beach lifestyles favored by retirees seeking calm and consistency.
The Philippines Keeps Foreign Pensions Outside Local Tax
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Philippine tax rules depend on residency classification, but foreign pensions from abroad are typically exempt from local income tax for many expatriate retirees. The Special Resident Retiree’s Visa, SRRV, provides a pathway to long-term residence for qualifying applicants who meet deposit and income requirements.
Georgia Keeps Its Hands Off Foreign Retirement Income
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Georgia, the country—not the U.S. state—offers tax exemption on most foreign-sourced income. This policy makes it an appealing spot for expats who want a tax-light retirement in a culturally rich setting. Tbilisi is growing in popularity among digital nomads and retirees alike.
Belize Keeps Foreign Pensions Tax-Free
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Belize offers a clean setup for retirees who want their U.S. pension to arrive tax-free under the Qualified Retired Persons program. It imposes a 0% tax on foreign income for QRP participants. QRP eligibility begins at age 45, with a monthly income of $2,000 from foreign sources.
The United Arab Emirates Does Not Charge Personal Income Tax
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The United Arab Emirates does not have a personal income tax, so pensions received there are not taxed by the government. There is also a UAE retirement option that can accept a monthly income of 20,000 dirhams as one way to qualify.
Monaco Leaves Most Residents Untaxed on Income
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Monaco does not charge income tax for most residents, so pensions brought in from abroad stay untaxed for non-French nationals. It is also a high-cost destination, so it tends to appeal to retirees who value the lifestyle and can afford Monaco-level housing costs.