AOW, pension and tax in Mexico: three articles, three directions
The treaty of 1993 splits your income in three. Your occupational pension and your annuity go exclusively to Mexico, your AOW the Netherlands may keep taxing up to a cap of 17.5 percent, and your government pension stays Dutch. Around that two things that have nothing to do with the treaty and still decide your monthly income: outside a treaty country the single AOW falls back to the married rate, and Mexico taxes residents on their worldwide income.
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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 Mexico, only Mexico taxes your occupational pension and your annuity, but the Netherlands may keep taxing your AOW, up to a cap. A government pension, such as ABP, as a rule stays taxed in the Netherlands.
Three things to know up front:
- The treaty with Mexico dates from 1993, has been in force since 1994 and was updated in 2008 with a protocol, a supplementary agreement.
- It doesn't send your income one way, but splits it in three. That is exactly why almost no Dutch-language page gets it right.
- Mexico as the country of residence may also tax your AOW, but it credits what the Netherlands already took.
| Income | Treaty article | Who taxes |
|---|---|---|
| Occupational pension, annuity | 18(1) | Mexico only, after the wage-tax exemption |
| Lump sum or one-off payment | 18(2) | the Netherlands may, if the employment was here |
| AOW | 18(3) | the Netherlands up to 17.5 percent of the gross; Mexico credits |
| Government pension (ABP) | 19(2) | the Netherlands, unless you are resident and Mexican |
| Dividend from a Dutch company | 10 | the Netherlands up to 15 percent |
| Property | 6 | the country where it lies |
Article 18 paragraph 1: occupational pension and annuity to Mexico
Pensions in respect of past employment and annuities are taxable only in the state where the recipient lives. There is no Dutch withholding at source, so no tax in the country the pension comes from. There is no threshold amount either.
The Netherlands does withhold wage tax, though, until you have applied for and obtained the exemption, with a Mexican certificate of residence. Paragraph 2 is the small print: a lump sum the Netherlands may tax after all if the employment was exercised here.
Article 18 paragraph 3: the AOW, shared with a cap
Here Mexico departs from most treaties. Pensions and other payments under a social security system, such as your AOW, may be taxed in the source state: the country they come from. That tax may not exceed 17.5 percent of the gross amount, though. So the Netherlands keeps taxing, up to that cap. Mexico may tax too as the state of residence and credits what the Netherlands already took.
After deregistration you no longer pay national insurance contributions. Then the withholding on AOW alone usually stays under the cap. That is a sum, not an assumption.
Article 19: the government pension stays Dutch
ABP and every other pension from past employment with the government fall under article 19 paragraph 2, and that designates the paying state. The only exception is whoever is resident and national of Mexico. Whoever has a mixed pension therefore has three sums done: the occupational pension to Mexico, the AOW shared, the government pension Dutch.
What Mexico does with it
Mexico taxes residents on their worldwide income. Article 1 of the Ley del Impuesto sobre la Renta, the Mexican income tax act, says it literally: all income, wherever the source lies, on the progressive annual scale of article 152.
You file every year with the tax number of the SAT, the Mexican tax authority (see CURP, RFC and registration). Your Dutch annual statement goes along for the credit of article 22: Mexico deducts the Dutch tax on your AOW, up to what it taxes on it itself.
And then the exemption that's on every English-language site. Article 93 exempts pensions up to fifteen UMA a day, in 2026 a good 53,493 pesos a month. The UMA is a Mexican unit of account. The statute ties that exemption to the accounts of the Mexican system: provenientes de la subcuenta del seguro de retiro. Whether it also applies to a Dutch pension is unsettled. Don't count on it until a contador, a Mexican accountant, confirms it in writing for your situation. Work out the Mexican tax without exemption as the worst case.
The residence test: the house in the Netherlands
Article 9 of the Código Fiscal de la Federación, the Mexican tax code, makes you tax resident as soon as you take up a home in Mexico. If you also keep a home in the Netherlands, the law looks at your centre of interests: more than half of your income from a Mexican source, or your professional activity in Mexico.
A pensioner with only Dutch income and a house in the Netherlands is then under Mexican law not a resident. Then the treaty doesn't apply: the Netherlands keeps taxing everything, Mexico nothing. That is a decision you take with the house, not with the visa.
The AOW blow for singles
Apart from the treaty, and harder: Mexico isn't among the 36 countries with which the Netherlands has a social security treaty (the list from the parliamentary questions of 2024).
Outside a treaty country the accrued AOW is exported at no more than the married rate, the AOW amount for married and cohabiting people. 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. Work out your monthly income with the export amount, not with your current AOW statement.
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. 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 tax authority can demand security.
And the child benefit stops with the quarter in which you leave: article 7b of the Child Benefit Act gives no entitlement for a child outside the EU, the EEA, Switzerland or a treaty country.
The honest summary
Occupational pension to Mexico, with an exemption you may not assume. AOW shared with a cap, and as a single person with twenty percentage points less. Government pension Dutch. It isn't a bad sum, but a sum of three parts, and the brochure mentions one.
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 Mexico 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
- Wetten.overheid.nl — the treaty with Mexico (1993), articles 6, 10, 14, 15, 18, 19 and 22 — 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
- Código Fiscal de la Federación, article 9 — when you are tax resident in Mexico — diputados.gob.mx
- Ley del Impuesto sobre la Renta, articles 1, 93 and 152 — residents pay on all their income, the pension exemption of fifteen UMA a day, and the annual scale — diputados.gob.mx
- INEGI — the UMA from 1 February 2026 — inegi.org.mx
Read on
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