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AOW, pension and tax in Japan: the treaty that changes everything

Japan is a treaty country, and that makes a difference: your accrued AOW (the Dutch state pension) goes with you in full — including the single person's rate of 70% — and your Dutch and Japanese pension years are added together. The pitfalls lie elsewhere: the choice between the Japanese contribution refund and the treaty, and a tax treaty with a clause that hangs on your transfers.

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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 Japan, the tax treaty allocates your pension and your AOW (the Dutch state pension) to Japan, your country of residence. Only if that income is not adequately taxed in Japan may the Netherlands levy tax.

Three things to know up front:

  • Your accrued AOW goes with you in full. Whoever knows the Dubai pages of this site knows what is at stake: outside treaty countries a single person gets the married rate of the AOW, 50 instead of 70 percent of the net minimum wage, for as long as you live there. For Japan that does not apply, and that is no coincidence but a treaty from 2009.
  • The tax treaty has a clause that hangs on your transfers. If you are a non-permanent resident in Japan, pension you don't transfer to Japan stays outside the Japanese levy, and thereby inside the Dutch one.
  • If you ever leave Japan again, you have to choose yourself: claim back your Japanese contributions, or leave your Japanese pension years in place.

The accrued AOW goes with you in full

Japan is on the SVB's list of treaty countries. That means the AOW you've built up is paid out in full in Japan, including the single person's rate of 70% of the net minimum wage. The fall to 50% under Article 9a of the AOW Act applies only to countries without a treaty.

What does simply carry on: every year outside the Netherlands you build up 2% less AOW. That gap can be repaired with voluntary insurance. You apply for it within a year of the end of the compulsory insurance (usually the day you leave), and you can insure yourself this way for a maximum of ten years. The contribution is 17.9% of your income, with a minimum of € 569 and a maximum of € 5,693 a year (2026). Whoever can take part at the minimum contribution buys back accrual cheaply that way.

Japanese contributions aren't money thrown away — thanks to totalisation

In Japan you contribute compulsorily to the pension system. As an employee you do that via the kōsei nenkin, the pension insurance for employees: a percentage of your salary, of which the employer pays half. Otherwise you pay the kokumin nenkin, the national pension, of ¥ 17,920 a month (2026).

The treaty makes those contributions valuable. Dutch and Japanese insurance years are added together for the qualifying periods: the minimum insurance period you need to be entitled to a pension. That way even a few Japanese years later yield a small, lifelong Japanese pension alongside your AOW. The Japan Pension Service confirms that the Dutch agreement belongs to the agreements with totalisation. That is unlike the British one, for example.

The lump-sum: money back straight away, but you wipe your periods

If you ever leave Japan again, the lump-sum withdrawal beckons: a refund of at most sixty months of contributions. You apply for it within two years of leaving. The downside is stated in so many words by the Japan Pension Service: the periods used lapse for good.

The rule of thumb: whoever worked in Japan briefly and is almost certain not to return takes the refund. Whoever stays longer or wants to let the treaty do its work leaves the periods in place. The refund never covers more than five years anyway, a lifelong pro-rata pension (in proportion to your Japanese years) does.

Rather have everything for Japan on one list?

Then we'll send you the departure checklist for Japan, with every step in order, and five mails about the pitfalls and the real costs. You can switch it off at any time.

We use your address, and your departure date if you fill it in, only for the checklist, the guide and the mails after it. You can unsubscribe under every mail.

The tax treaty: the clause that hangs on your transfers

The 2010 tax treaty allocates pensions and AOW to the country of residence. It has no amount threshold like the German treaty, but it does have a reservation of its own. If the income in Japan is "not adequately subject to tax", the Netherlands as the source country may levy tax: as the country the income comes from.

And that's exactly where it touches the Japanese side. Whoever has lived in Japan for five years or less in total within the past ten years (and isn't Japanese) is a non-permanent resident there. They pay Japanese tax only on foreign income that is remitted to Japan. Dutch pension that you leave in your Dutch account then stays outside the Japanese levy, and thereby inside the Dutch one.

This interplay is too important to decide on a website: take it to a tax adviser who knows both countries. What you should remember from this site is only that it exists.

When do you file a return in Japan, and when does the municipal tax come?

For most employees the employer settles Japanese income tax with the year-end adjustment, in which it corrects the tax withheld at the end of the year. A return of your own is then not needed. That changes as soon as there is income alongside your salary, such as a Dutch pension or the rent from a house you kept.

Situation What you do
One employer, salary up to ¥ 20 million, other income up to ¥ 200,000 nothing: your employer's year-end adjustment suffices
Salary above ¥ 20 million, or other income above ¥ 200,000 file a return yourself, from 16 February to 15 March of the following year
Inhabitant tax (jūminzei, 10% in Tokyo) levied on whoever lives in the municipality on 1 January, on the previous year's income; for employees withheld from June through May

That last one surprises newcomers. Whoever arrives after 1 January pays no inhabitant tax in their first calendar year. But from June of the second year a sizeable amount suddenly comes off your salary.

And the departure side: you apply for deferral here yourself

On your accrued pension and annuity the Netherlands imposes a protective assessment on emigration: an assessment for which you can get deferral of payment. Within the EU you get that deferral automatically. For Japan you apply for it yourself. The Belastingdienst may ask for security: a bank guarantee, a mortgage right or a pledge. For a pension or an annuity insurance with a Dutch pension fund or insurer, that isn't needed. If you keep to the rules for ten years (no surrender), you can ask for remission.

And the mortgage interest deduction on a Dutch home you keep lapses. Japan falls outside the circle of countries for qualifying non-resident taxpayer status, the arrangement that lets you keep Dutch deductions as a resident of another country.

In Vertrekklaar this is phase 3 of 5 of the journey: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to Japan.

What this means for your numbers →

Want to know more about this?

Then we'll send you the departure checklist for Japan, with every step in order, and five mails about the pitfalls and the real costs. You can switch it off at any time.

We use your address, and your departure date if you fill it in, only for the checklist, the guide and the mails after it. You can unsubscribe under every mail.

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.

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