Dutch tax on pensions

Reversal Rule

  • In Holland by employer paid pension premiums are exempted from wages taxation. The own contribution is tax deductible. The pension annuity is taxed as of pension age.
  • If not all conditions are met, instant and total taxation including a stiff fine might materialize.

No Lum Sum / Exemption

  • Contrary to the UK where lump sum deposit is allowed, Holland allows only lifelong pension annuities.
  • Likewise Holland does not allow a 25% exemption from taxation.

Dutch 30% Tax Ruling and Pensions

  • Expats who reside in Holland can apply for a 30% tax ruling. If granted they can i.e. receive 30% of their wages without tax.
  • In general these 30% cannot be included in the pension earning wages. Only in specific instances it is allowed.

Holland and International Tax on Pensions

  • Before retirement expats should check the tax situation of each pension claim.
  • It might prevent high tax claims by using international (mostly bilateral OESO based) double tax treaties and unilateral national regulations on double taxation.
  • I.e. the country where the retirering expat resides is entitled to tax regardless of nationality/origin of pension. Many exceptions (often for governmental pensions) do exist.
  • Double tax treaties don’t create the right to tax. They regulate which country may implement existing national tax law.
  • Holland has an extensive international network of more than 100 bilateral double tax treaties. Use it to your advantage.