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Keeping a German bank account abroad: what applies to Mallorca expats

Responsible for this content: Frank Menze

Anyone emigrating from Germany to Mallorca sooner or later asks themselves the same question: Can I keep my German bank account, or do I have to close it? The short answer: there is no legal obligation to close it, and there is even a little-known statutory entitlement to an account that applies regardless of your residence in Germany. In this guide you'll learn what the basic account entitlement under the Zahlungskontengesetz (Payment Accounts Act) actually means, why a bank or landlord may not reject your German or Spanish IBAN, which income on your German account is still taxed in Germany – and which is no longer – as well as what you need to declare in Spain once you become tax-resident there.

Keeping a German account abroad: law and taxes

Not sure whether your German account remains valid after moving, or how to get your tax affairs properly sorted?

Do you have to close your German account when you move abroad?

No. There is no rule in Germany that forces you to close your current account when emigrating. Whether your bank continues to run the account after you move away depends solely on its general terms and conditions (AGB) – this is a contractual, not a legal, question. Some institutions require a domestic address and close the account without one, while others continue running accounts with a foreign address without any issue. Both claims – "banks aren't allowed to do that" and "banks must close the account" – are false.

It's important to distinguish between two completely different things:

Keeping an existing current account Entitlement to a basic account
Legal basis None – purely a contractual matter (bank's AGB) § 31 Zahlungskontengesetz (ZKG, Payment Accounts Act)
Is residence in Germany required? No, but the bank can request a current address No
Risk of closure Possible if the AGB require a domestic address No additional protection against closure beyond the basic account
Scope of functions As originally agreed Basic payment account functions

Note: If your existing bank closes your account, you are not automatically left without a German bank connection. The statutory entitlement to a basic account applies regardless of whether you are registered (gemeldet) in Germany.

The entitlement almost no one knows about: the basic account under § 31 ZKG

This entitlement is missing from many German-language accounts, yet it is the safety net if your own bank terminates the relationship: under § 31 of the Zahlungskontengesetz, an institution that offers payment accounts to consumers must conclude a basic account contract with every eligible person. Eligible is expressly every consumer lawfully residing in the European Union – expressly including people without a fixed residence. Anyone living on Mallorca is lawfully present in the EU and therefore meets this requirement, regardless of whether they still have a residence in Germany.

Point Regulation Legal basis
Entitled to claim Every consumer lawfully resident in the EU § 31 para. 1 ZKG
Residence in Germany required? No § 31 para. 1 ZKG
Processing period Without delay, at the latest 10 business days after receipt of the application § 31 para. 2 ZKG
Confirmation obligation The institution confirms receipt of the application with a copy § 31 para. 2 ZKG
Scope of the entitlement Basic account with fundamental payment functions – no entitlement to a specific institution or to previous terms and conditions § 31 ZKG

Here's exactly how to proceed if a bank closes your account or refuses to open one for you:

  1. First check whether the termination is actually justified under the terms and conditions, or whether it's simply a mistake on the bank's part.
  2. Keep your registered address up to date as soon as you are officially registered on Mallorca.
  3. Submit an application for a basic account under § 31 ZKG to an institution that offers payment accounts for consumers.
  4. Request and keep the confirmation of receipt of your application.
  5. At the same time, clarify whether you need a Spanish account for everyday life in any case.

Note: The entitlement guarantees you a basic account with fundamental functions – not the continuation of your previous account with all its former terms, and not the choice of a particular institution.

IBAN discrimination: when a German or Spanish IBAN is rejected

A problem many emigrants encounter is not a technical limitation but a legal violation: under Article 9 of EU Regulation No. 260/2012 (the SEPA Regulation), a payee using direct debits may not stipulate in which member state the payer's account is held – as long as the account can be reached via SEPA direct debit. This applies in both directions: a Spanish provider may not reject a direct debit from your German IBAN, and a German provider may not refuse your Spanish IBAN. This phenomenon is referred to as IBAN discrimination.

Note: If you experience a rejection of your IBAN purely because of the country code, this constitutes a breach of Art. 9 of the SEPA Regulation – not a technical necessity. If problems with a bank or contractual partner persist, it can help to check the Law & Finance business directory to find legal support on the ground.

What Germany still taxes after you move away

As soon as you relocate your residence and habitual abode to Spain, you generally become subject to limited tax liability in Germany. For your German account, what matters is which type of income lands on it – here it's worth distinguishing precisely according to § 49 Abs. 1 Nr. 5 EStG:

Type of income Tax treatment after moving abroad Legal basis
Dividends from German companies Remain subject to withholding tax if the debtor's residence, place of management or registered office is in Germany; the double taxation agreement limits the rate § 49 Abs. 1 Nr. 5 Buchst. a EStG
Ordinary credit interest on a German account As a rule, no limited tax liability in Germany, provided the capital is not secured by domestic real estate or something comparable § 49 Abs. 1 Nr. 5 Buchst. c EStG
Worldwide income as a Spanish tax resident Obligation to declare in Spain, regardless of which country the account is held in Spanish principle of worldwide income

This is the point where many emigrants unnecessarily continue paying withholding tax (Abgeltungsteuer) on their interest, even though as non-residents they often no longer have to. The prerequisite for this, however, is that you actually inform your bank of your changed tax status – otherwise the bank will keep deducting tax based on whatever data it holds. Exactly how a correction or refund proceeds in an individual case depends on your bank and your situation; this should be clarified with a tax adviser familiar with both countries. You can find out more about the underlying system in the guide on the double taxation agreement between Germany and Spain and on tax residency and the 183-day rule.

The Spanish side: Modelo 720 and automatic data exchange

As soon as you are tax resident in Spain, you declare your worldwide income there – and that includes interest and dividends on your German account. In addition, the Spanish informational declaration Modelo 720 applies to accounts held abroad, which is administered by the Agencia Tributaria. Details on thresholds, deadlines and possible consequences depend on the individual case and are subject to change – you can find reliable, up-to-date information on this in our dedicated guide on Modelo 720.

In addition, the following applies: German banks report accounts of persons who are tax resident abroad as part of the automatic exchange of information between tax authorities. This is the real reason why "quietly" keeping the German account running without a corresponding declaration in Spain is not a viable option – the data reaches the authorities regardless.

Note: Don't confuse residence and tax residence. For Spanish tax liability, what usually counts is the 183-day rule within the calendar year, not the question of where your account is held.

Practical points: address, identification, pension

A few unspectacular but important details determine whether daily life runs smoothly or causes trouble:

  • Keep your address up to date: Your bank needs your actual address. A fake address at relatives' in Germany is a false declaration – both towards the bank and towards the tax authorities.
  • Identification after the move: Procedures such as the classic Postident often no longer work smoothly from abroad. Which alternatives a bank offers is up to the respective institution – find out directly from them.
  • Pension payment: The German pension can be paid either into an account in Germany or into an account elsewhere in the EU. Details on taxation can be found in the guide Taxing German pension in Spain.

German account and Spanish account: why you ultimately need both

Keeping a German account doesn't rule out having a Spanish account – on the contrary, in everyday life on Mallorca you'll usually need both in parallel. Rent, electricity, water and many direct debits locally practically require a Spanish IBAN, while your German account remains useful for pension, rental income from Germany, insurance and ongoing standing orders. How to open an account in Spain, what types of accounts exist, and what you need as a resident or non-resident is explained in the guide Opening a bank account in Spain. For cashless everyday payments between friends and small amounts, it's also worth taking a look at Bizum, the Spanish equivalent of many German instant transfer apps.

Most common mistakes when dealing with a German account abroad

Mistake Why it's problematic
Not informing the bank about the move The registered address formally remains incorrect, and the automatic exchange of information reveals foreign residency anyway
Assuming the bank "isn't allowed" to close the account Termination clauses are a matter of terms and conditions, not a legal prohibition
Assuming an IBAN rejection is normal It generally violates Art. 9 of the SEPA Regulation
Continuing to have interest taxed without reflection Ordinary interest is usually not domestic income for non-residents under § 49 EStG
Not declaring foreign accounts in Spain The reporting obligation (Modelo 720) applies regardless of where the account is held
Keeping only one account Without a Spanish account, everyday life on the ground grinds to a halt; without a German account, pension processing becomes unnecessarily complicated

Checklist: Your German account before and after the move

  1. Before moving, find out whether your bank continues to run accounts with a foreign address or threatens to close them.
  2. Update your address with the bank as soon as you're registered on Mallorca.
  3. Check whether you also need to apply for a basic account under § 31 ZKG in case your existing account is closed.
  4. Inform your bank of your changed tax residence so that withholding tax on interest is handled correctly.
  5. Find out how your pension should be paid out in future.
  6. Clarify with a tax adviser whether and how you need to declare German accounts in Spain under Modelo 720.
  7. Open a Spanish account in parallel for rent, electricity and everyday direct debits.

What comes next?

Keeping a German account is usually just one of several financial matters to sort out when emigrating. At the same time, you should properly document your tax residency, set up your Spanish account and – should you ever move back – know what needs to be reversed in terms of tax and administration in the event of a return to Germany.

Conclusion

You don't have to close your German account when moving to Mallorca, and even if a bank does close it, § 31 ZKG provides an explicit right to a basic account that is not tied to residence in Germany. Tax-wise, you generally lose nothing when it comes to ordinary interest – dividends, however, remain subject to withholding tax. What matters is that you inform your bank of your new residence and take Spain's reporting obligations for foreign accounts seriously. Anyone who properly maintains both accounts – the German one and a Spanish one – side by side has the most solid basis for pension, everyday life and taxes.

Official sources

Do I have to close my German bank account if I emigrate to Mallorca?
No, there is no legal obligation to do so. Whether your bank keeps the account open is governed by its terms and conditions, not by law.
Am I still entitled to a German bank account as an emigrant?
Yes. Under § 31 ZKG, every consumer lawfully residing in the EU is entitled to a basic account, regardless of whether they live in Germany.
How quickly must an institution decide on my application for a basic account?
It must offer to conclude the contract without delay, and no later than ten business days after receiving the application, and must confirm receipt with a copy.
May a bank or provider reject my Spanish IBAN?
No, Art. 9 of the SEPA Regulation (EU) No. 260/2012 expressly prohibits this so-called IBAN discrimination, in both directions between Germany and Spain.
Do I still pay tax in Germany on interest from my German account?
Generally not, since ordinary credit interest for taxpayers with limited tax liability is usually not considered domestic income under § 49 (1) No. 5 (c) EStG.
What about dividends from German public limited companies (Aktiengesellschaften)?
They remain taxable in Germany under § 49 (1) No. 5 (a) EStG if the debtor has its residence, place of management or registered office in Germany; the double taxation agreement limits the applicable rate. Fund units are subject to separate rules, which this guide does not cover.
Do I have to declare my German bank account in Spain?
As a Spanish tax resident, the Modelo 720 information return applies to accounts held abroad, regardless of where the account is held.
Can my German pension still be paid into my German bank account?
Yes, the pension can be paid either into an account in Germany or into an account elsewhere in the EU.