Pensions from the Netherlands
The new double taxation agreement between the Netherlands and Germany came into force on 1 January 2016. It stipulates on which income taxes have to be paid in which country. The agreement states that if the Dutch pensions (private and statutory pensions added together) are higher than € 15,000, the total taxes to be paid are due in the Netherlands. If the pensions are lower, tax is paid in Germany.
- You receive a civil servant’s pension from the Netherlands (usually paid by the ABP)
- You receive more than €15,000 from pensions, annuities and benefits from the Netherlands (not including civil servant pensions)
- You receive a settlement for a pension or life annuity
The Dutch pensions are taxed in Germany, after deduction of the taxes paid in the Netherlands, if the pensions are more than € 15,000. Civil servant pensions are only taxed in the Netherlands.
Application for exemption from Dutch tax and contributions
Is your pension from the Netherlands less than € 15,000 gross per year? You are then liable to pay tax on this pension in Germany. However, the authorities in the Netherlands are obliged to withhold tax at the source on the pension. You can therefore apply to the Dutch tax authorities for exemption from withholding tax on your pension. The Dutch tax authorities will then inform your pension office in a decision that they are not allowed to withhold income tax. You can download the forms from the website of the Dutch tax office. These forms are only available in Dutch.
The application for exemption cannot be made for previous years, but only beginning with the current year. If you have wrongly paid tax on your pension or benefit, you can file a tax return in the Netherlands for that year to reclaim it.
Income from work
If you work in the Netherlands. you can find this information here.
Transitional legislation 2016
The agreements in the new treaty between the Netherlands and Germany apply from 2016. These new agreements may result in a financial disadvantage for you. Is this the case for you? If so, you can still opt to apply the agreements in the old treaty in 2016 only. We call this the transitional right.
Example 1
You live in Germany and receive a statutory old-age pension from the Netherlands. You have to pay tax on your statutory old-age pension in the Netherlands in accordance with the agreements in the old treaty. The agreements in the new treaty mean that you will have to pay tax on your state old-age pension in Germany from 2016. It is possible that you will pay more tax on your state old-age pension in Germany in 2016 than you would pay in the Netherlands. If you choose to apply the transitional right, you will still have to pay tax on your state old-age pension in the Netherlands in 2016.
Example 2
You live in the Netherlands and work as a pilot for an airline based in Germany. You have to pay tax on your salary in Germany according to the agreements in the old treaty. The agreements in the new treaty mean that you will have to pay tax on your wages in the Netherlands from 2016. It is possible that you will pay more tax on your wages in the Netherlands in 2016 than you would pay in Germany. If you choose to apply the transitional right, you will still have to pay tax on your wages in Germany in 2016.
The transitional right only applies to 2016. From 2017, the agreements in the new treaty always apply.