AOW, pension and tax in Costa Rica: without a treaty the Netherlands keeps taxing, and without credits
The Netherlands has no tax treaty with Costa Rica, and that reverses the sum the brochure promises. Costa Rica doesn't tax your Dutch income — that is right — but the Netherlands simply keeps taxing your AOW, your pension and your annuity, without exemption and usually without tax credits. And outside a treaty country a single person gets the married rate of the AOW, almost a third less gross. The real sum, rule by rule.
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Written and checked by Auke on , against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.
If you live in Costa Rica, the Netherlands keeps taxing your AOW and your pension, because there is no treaty against double taxation with Costa Rica. Costa Rica itself levies nothing on them.
Three things to know up front:
- "Costa Rica doesn't tax foreign income": that is true, but it is exactly the half-truth with which English-language sites put Dutch people on the wrong foot. For an American it is the whole truth, because America taxes its citizens wherever they live.
- For a Dutch person the sum consists of three parts: what the Netherlands does without a treaty, what Costa Rica does, and what the Wet BEU (the Dutch act restricting the export of benefits) does with the AOW. This article completes that sum.
- As a single person you get your AOW in Costa Rica at the married rate, the lower AOW amount for married and cohabiting people.
| Income | The Netherlands | Costa Rica |
|---|---|---|
| AOW | taxed, without a treaty and usually without tax credits; as a single person at the married rate (50 instead of 70 percent) | not taxed: no Costa Rican source |
| Occupational pension, annuity | taxed, no exemption to apply for | not taxed |
| Government pension | taxed | not taxed |
| Home in the Netherlands | always taxed in the Netherlands: box 3 when let or a holiday home, box 1 if it is still your own home | — |
| Wages or rent in Costa Rica | — | taxed as income from a Costa Rican source |
| Caja premium | — | compulsory, on a reference income of at least the amount of your card |
There is no treaty
The Netherlands has with Costa Rica only a treaty on the exchange of information in tax matters. There is no treaty against double taxation. Costa Rica accordingly isn't on the list of treaty countries of NederlandWereldwijd. That page also says what then applies: if there is no tax treaty with your country of residence, the Netherlands has the right to tax.
The Netherlands taxes under its own law everything that comes from the Netherlands: your AOW, your occupational pension, your government pension, your annuity. The SVB and your fund keep withholding, and there is no exemption to apply for. You file a return as a non-resident taxpayer on your Dutch income.
What does fall away, and what comes back for it
Two things lapse with your deregistration: the national insurance contributions and the Zvw contribution, the contribution for Dutch health insurance. You're no longer insured, so on your AOW and pension you pay only tax. In the first bracket that saves a lot.
But against that stands something most people don't see coming. Whoever lives outside the EU, the EEA, Switzerland and the BES islands isn't a qualifying non-resident taxpayer. Such a person, according to the Belastingdienst, usually has no entitlement to the tax part of the tax credits. No general tax credit, no elderly person's credit.
Have a tax adviser work it out net before you believe the brochure promise. The outcome is "Dutch taxed, without contributions and without credits", and that is a different sum than "tax-free".
What Costa Rica does: nothing, and yet something
Article 1 of the Costa Rican income tax hits income from a Costa Rican source. Your Dutch AOW, pension, annuity and rental income aren't that: Costa Rica taxes nothing on them and asks no return for them. If you work in Costa Rica or let a house there, then that is Costa Rican income. And for a temporary resident as pensionado or rentista working is only allowed with a separate permission.
What Costa Rica does ask of you is no tax but a premium: the compulsory affiliation to the Caja, the Costa Rican social insurance. That premium is on a reference income of at least the amount of your card. It is in the healthcare article, and it belongs in the same sum.
The AOW blow for singles
Apart from the tax, and harder: Costa Rica isn't among the 36 countries with which the Netherlands has a social security treaty. The minister listed them in 2024 in answer to parliamentary questions. Costa Rica isn't among them.
Outside a treaty country the accrued AOW is exported at no more than the married rate. For couples little changes, because they already have that rate. But a single person falls back from 70 to 50 percent of the net minimum wage. If you still receive an AOW supplement for a younger partner, it stops. That supplement was abolished in 2015. Only people who already had it keep it.
Twenty percentage points of AOW is for many budgets the difference between ample and tight, and almost no site on Costa Rica mentions it. Work out your monthly income with the export amount, and have the pension statement for the DGME name that amount — the income test of 1,000 dollars looks at what you really get.
What the Netherlands doesn't let go of either
The year of departure goes with an M return, the return for the year of departure. Don't wait for a letter: it only reaches you if your address abroad is correct in the RNI, the register for people who live outside the Netherlands. Immovable property in the Netherlands is always taxed in the Netherlands, also without a treaty: a let property or a holiday home falls into box 3, your own home into box 1.
An annuity, pension entitlement or substantial interest travels with a protective assessment. Outside the EU the deferral is no automatism: you apply for it, and the Belastingdienst can demand security.
And the child benefit: article 7b of the Child Benefit Act gives no entitlement for a child outside the Netherlands, unless it lives in an EU country, the EEA, Switzerland or a treaty country. Costa Rica is none of those. The child benefit stops with the quarter in which you leave.
The honest summary
You don't become tax-free in Costa Rica. You keep the Dutch tax burden on your AOW and your pension, without the Dutch contributions but also without the Dutch credits, and Costa Rica adds the Caja premium. As a single person twenty percentage points of AOW come on top. It is a different sum than the brochure promises, and you make it before you leave.
In Vertrekklaar this is phase 1 of 5 of the journey, step 1.2: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Costa Rica or go straight to step 1.2 in the open plan.
What this means for your numbers →
What this rests on
The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.
- NederlandWereldwijd — the letter about the M return goes to your address abroad, if it is correct in the RNI — nederlandwereldwijd.nl
- NederlandWereldwijd — which countries the Netherlands has a tax treaty with, and what applies without one — nederlandwereldwijd.nl
- Belastingdienst — tax credits when you live outside the Netherlands — belastingdienst.nl
- Belastingdienst — which deductions and credits do I have when I live abroad — belastingdienst.nl
- Belastingdienst — living abroad with Dutch income — belastingdienst.nl
- Ley 7092, article 1 — the income tax hits income from a Costa Rican source — comex.go.cr
- Wetten.overheid.nl — the treaty with Costa Rica on the exchange of information in tax matters — wetten.overheid.nl
- Algemene Ouderdomswet — article 9a (married rate outside the Netherlands) and article 8a (no supplement) — wetten.overheid.nl
- Answers to parliamentary questions 2024Z02891 — the 36 treaty countries for the AOW export — open.overheid.nl
- Algemene Kinderbijslagwet — article 7b, no child benefit outside the Netherlands, the EU or a treaty country — wetten.overheid.nl
Read on
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The Netherlands and Andorra have had a tax treaty since 2025. Because of it the Netherlands continues to tax your AOW, your company pension and your annuity. Andorra also taxes them as a resident, at 10 percent with 24,000 euros tax-free, but credits the Dutch tax. There is no social security agreement: a single person gets the AOW for married people, about 30 percent less. You no longer get a tax credit.
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- ArgentinaClosing the Netherlands5 min
AOW, pension and tax in Argentina: two treaties, and the AOW goes with you in full
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