AOW, pension and tax in Zanzibar: no treaty, so the Netherlands taxes

If you live in Zanzibar, the Netherlands keeps taxing your AOW, your company pension, your ABP pension and your annuity. Tanzania, of which Zanzibar is part, is not in the government's overview of tax treaties as of 1 October 2026. So there is no treaty that moves any of that taxation to Tanzania. At the same time, Tanzania can tax you as a resident, in Zanzibar too.

Three things to know in advance:

• The Netherlands taxes under its own law, with wage tax withheld at source. You cannot apply for an exemption for your pension fund, as people in treaty countries can.
• You pay Dutch tax without the tax credit. Only if you are still insured in the Netherlands for a national insurance scheme do you get the contribution part.
• Tanzania is not among the countries with a social security agreement. As a single person you receive the AOW for married people.

Income	Netherlands	Tanzania, if you are resident there
AOW	taxed; a single person gets the married rate (50 instead of 70 % of the net minimum wage)	how TRA treats the AOW is not in the law: ask
Company pension, ABP	taxed, as pay for work in the Netherlands	the payment minus your own contributions counts (s. 63), with a credit for Dutch tax (s. 98)
Annuity	taxed if the premiums were deductible	have it checked how TRA treats it
Your first two years as a resident	no difference	only income from Tanzania taxed (s. 6(2))

Why does the Netherlands keep taxing?

Because there is no treaty. Section 7.2 of the Income Tax Act 2001 lists what you declare in the Netherlands as a non-resident: payments from a Dutch public body such as the SVB, pay for work in the Netherlands, which covers your company and ABP pension, and your annuity if the premiums were deductible. So the SVB withholds wage tax on your AOW, and your pension fund on your pension. Relief from double taxation then has to come from Tanzania, and that credit has a ceiling.

What does Tanzania do?

Income tax is not a matter for Zanzibar itself. The Income Tax Act says: "This Act shall apply to Mainland Tanzania as well as Tanzania Zanzibar." The Tanzania Revenue Authority (TRA, the Tanzanian tax office) collects it on the island as well.

Under s. 86 of the Act you are resident if you:

• have a permanent home in Tanzania and are present there for any part of the year;
• are in Tanzania for 183 days or more in a calendar year;
• are in Tanzania in the year and the two years before for an average of more than 122 days a year.

A resident pays tax on all income, wherever it comes from (s. 6(1)). Newcomers get a favourable exception: anyone who, at the end of the year, has been resident for two years or less in their whole life pays only on income from Tanzania (s. 6(2)).

After that, a pension from a foreign fund counts: the payment minus the contributions you paid yourself (s. 63). Under s. 98 you may credit the Dutch tax on that pension, but only up to the average Tanzanian rate on that income.

Three things we could not verify with TRA: how TRA counts the two years of s. 6(2), how the AOW is treated (s. 63 is about pension funds, and the AOW is not one), and what is left in your case after the credit. Have a Tanzanian tax adviser confirm this before you work with a net amount. Either way, expect to file a return with TRA.

Which rates apply in Tanzania?

TRA publishes the same table for the mainland and for Zanzibar, and the Finance Acts of 2025 and 2026 did not change the bands. A non-resident pays 30 %.

Annual income (TZS)	Tax
up to 3,240,000	0 %
3,240,000 to 6,240,000	8 % of the excess
6,240,000 to 9,120,000	TZS 240,000 plus 20 % of the excess
9,120,000 to 12,000,000	TZS 816,000 plus 25 % of the excess
above 12,000,000	TZS 1,536,000 plus 30 % of the excess