AOW, pension and tax in Indonesia: article 19 is the lesson

Does the four-year expat scheme apply to you?

In principle not. Since the Cipta Kerja law Indonesia taxes a foreign resident taxpayer, under conditions, only on income from Indonesia. That applies for four tax years, from the moment they became a resident taxpayer.

Regulation PMK 18/2021 gives that treatment only to those with certain expertise. That means:

• a position on a list of 25 types;
• knowledge of science, technology or mathematics, with a certificate;
• at least five years of work experience;
• the duty to transfer that knowledge.

You apply for it at your tax office, which decides within ten working days.

And the most important detail for a Dutch national: the scheme does not apply if you make use of the tax treaty. You choose one or the other. A retiree with a Dutch pension moreover doesn't fit the list of positions.

Don't count on the expat scheme that circulates on forums. It is written for foreign experts in employment, runs for four years, and excludes the treaty. For a retiree the ordinary route of the treaty is the only one that counts: the Netherlands may tax, Indonesia gives a credit.

Does the accrued AOW go along in full?

Yes. Indonesia is on the list of countries with which the Netherlands has a social security agreement. To those countries the Netherlands exports the full AOW, so including the single person's rate of 70 per cent of the minimum wage. To countries without such a treaty only the rate for married people goes along. Accrual does stop on your departure date: every year you are not insured, you later get 2 per cent less AOW, unless you insure voluntarily with the SVB within a year. More on that in your AOW accrual stops on departure.

What else does the Netherlands not let go of?

For the year of departure you file an M return, the tax return for the year in which you emigrate.

If you built up pension or annuity in the Netherlands with a tax advantage, or hold a substantial interest, a protective assessment follows. You don't have to pay that assessment for up to ten years, as long as you follow the rules. After that you can ask for remission for pension and annuity. For a substantial interest the assessment stays valid indefinitely. If you emigrate to an EU or EEA country, you automatically get deferral of payment. For Indonesia you don't: then you apply for it yourself, as stated on the assessment.

The sum you make before leaving: calculate your net monthly income with continuing Dutch tax, and put the Indonesian costs next to it. With this list you know exactly what to ask a tax adviser.

In Vertrekklaar this is phase 3 of 5 of the journey, step 3.2: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Indonesia or go straight to step 3.2 in the open plan.