AOW, pension and tax in Paraguay: full AOW, no tax treaty
For the AOW Paraguay is a treaty country: even a single person receives the full AOW there. There is no tax treaty, so the Netherlands simply keeps taxing your AOW, your pension and your annuity, usually without tax credits. Paraguay only taxes income from Paraguay, and a Dutch pension does not fall under that.
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If you live in Paraguay, you receive your full AOW, even as a single person. The Netherlands and Paraguay signed a treaty in 2005 on paying out social security benefits, which has applied since 1 March 2008. In 2024 the minister listed Paraguay among the 36 countries and territories outside the EU, the EEA and Switzerland with which the Netherlands has such an agreement; to all of them except China and Pakistan the full AOW is paid. There is no tax treaty. Paraguay is missing from the Belastingdienst overview of January 2026 and from the NederlandWereldwijd list. So the Netherlands keeps taxing your AOW and your pension. Paraguay only taxes income from Paraguay.
| Income | Netherlands | Paraguay |
|---|---|---|
| AOW | taxed; a single person keeps 70 % of the net minimum wage | not income from Paraguay |
| Company pension, ABP | taxed, as wages for work in the Netherlands | not income from Paraguay |
| Annuity | taxed if the premiums were deductible | not income from Paraguay |
| Sale of a house in the Netherlands | not income from Paraguay, according to the DNIT | |
| Wages for work in Paraguay | taxed above 80,000,000 guaraní gross a year, 8 to 10 % | |
| Rent from a house in Paraguay | taxed, 8 % on half the rent |
For the AOW Paraguay is a treaty country, but for tax it is not. Those are two different treaties. The 2008 treaty ensures that your AOW goes with you in full; on the question of which country levies tax, it says nothing.
Why does the Netherlands keep taxing?
NederlandWereldwijd puts it plainly: if there is no tax treaty with your country of residence, the Netherlands has the right to levy tax. Article 7.2 of the Income Tax Act sets out what you then declare in the Netherlands: your pension as wages for work you did in the Netherlands (paragraph 2 under b), an annuity whose premiums were deductible (under d), and benefits from a Dutch public-law body such as the SVB (under e). Your company pension, your annuity and your AOW remain Dutch income; see also where your pension is taxed.
For "other countries", which includes Paraguay, the Belastingdienst lists only the entrepreneur's deduction and the tax-free allowance in box 3 as deductions. The tax credits are not listed. Have your net amount calculated.
How much AOW do you get?
The full amount. Outside the Netherlands the AOW is, under article 9a of the AOW Act, equal to that of a married person: 50 % of the net minimum wage instead of 70 %. The treaty with Paraguay sets that restriction aside: a provision that limits a benefit only because you live in the other country does not apply. The Supplementary Benefits Act and social assistance are expressly excluded from that.
The SVB pays the AOW to Paraguay in euros, through Citibank, with at most € 0.48 in costs per payment. If the SVB asks for proof of life, you can send it through an app. A pre-printed life certificate can be stamped by the honorary consul in Asunción.
What does Paraguay tax?
Paraguay has a territorial system. The personal income tax, the IRP, only taxes income from Paraguay under Ley 6380: from activities in the country, from property located there or from rights used there. A Dutch pension or a Dutch AOW does not belong to that. The DNIT ruled in a binding answer that even the sale of a house abroad is not income from Paraguay.
What Paraguay does tax is wages and rent from Paraguay. On wages you only pay something if you earn more than 80,000,000 guaraní gross a year, at rates of 8, 9 and 10 %; see working in Paraguay. On rent you pay 8 % on half; see buying a house in Paraguay.
Are you leaving before your AOW age?
According to the SVB, anyone who goes to live outside the Netherlands is usually no longer insured for the AOW. Every year without insurance means 2 % less AOW later on. You apply for voluntary insurance within one year after you stop being insured; see AOW on emigration. The treaty with Paraguay governs the export of benefits, not which country insures you if you work there. And Paraguay is not in the SVB overview of treaty countries for work and social security either.
What else does the Netherlands keep hold of?
An annuity, pension entitlement or substantial interest travels with a protective assessment. Outside the EU and the EEA the deferral is not automatic: you request it in writing. The deferral runs for at most ten years.
You pay your healthcare costs in Paraguay yourself; see healthcare in Paraguay. Which residence permit suits you is covered in the residence routes, and the order of all the steps in the route to Paraguay.
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 Paraguay 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.
- Belastingdienst — Verdragsstaten IB niet-ingezetenen, January 2026 (Paraguay is not in it) — download.belastingdienst.nl
- NederlandWereldwijd — the countries with a tax treaty, and what applies without one — nederlandwereldwijd.nl
- Income Tax Act 2001, article 7.2 — which Dutch income a non-resident taxpayer declares — wetten.overheid.nl
- Belastingdienst — deductions and tax credits if you live in another country — belastingdienst.nl
- Treaty Netherlands–Paraguay on the export and enforcement of social security benefits (Asunción, 22 December 2005), in force since 1 March 2008 — wetten.overheid.nl
- Answers to parliamentary questions 2024Z02891 — Paraguay among the 36 treaty countries with full AOW export — open.overheid.nl
- General Old Age Pensions Act, articles 9 and 9a — 70 and 50 % of the net minimum wage, and the married rate outside the Netherlands — wetten.overheid.nl
- SVB — the AOW in euros through Citibank, at most € 0.48 per payment — svb.nl
- SVB — every uninsured year 2 % less AOW, and voluntary insurance within one year — svb.nl
- SVB — the overview of treaty countries for work and social security, without Paraguay — svb.nl
- Belastingdienst — the protective assessment and deferral outside the EU (2026 tax return notes) — belastingdienst.nl
- Ley 6380/2019, articles 47 and 48 — the IRP only taxes income from Paraguay (BACN) — bacn.gov.py
- DNIT — binding ruling, selling a house abroad is not income from Paraguay — dnit.gov.py
- NederlandWereldwijd — the life certificate in Paraguay — nederlandwereldwijd.nl
- DNIT — the IRP, the personal income tax, on income from Paraguay — dnit.gov.py
- DNIT — Ley 6380/19, what counts as income from Paraguay — dnit.gov.py
- DNIT — frequently asked questions, tax resident with a residencia permanente — dnit.gov.py
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