What changes financially when you move to Paraguay?
Tick where your income comes from. You then see which rules Paraguay and the Netherlands apply to your situation: which country may tax you, which schemes exist and how you get insured. With the source, so you can check it yourself.
This applies to everyone who moves. Tick above what applies to you, and the rest will appear.
Which country may tax
Which part of your income may your new country of residence tax?
Paraguay only taxes income from Paraguay
The IRP, the Paraguayan income tax for individuals, taxes income from Paraguay. A Dutch pension and your AOW don't fall under it according to the text of the law.
The law says "rentas de fuente paraguaya": income from activities in the country, from goods located there and from rights used there. So on your pension you generally pay tax in one country: the Netherlands. Have a contador confirm that for your income.
- taxed
- only income from Paraguay
You're a tax resident with a residencia permanente
According to the DNIT, a natural person is a tax resident of Paraguay if they have a residencia permanente.
With only a residencia temporal you aren't one yet according to that text. For your Dutch pension it makes no difference: that isn't income from Paraguay.
- tax resident
- with a residencia permanente
What the Netherlands doesn't let go of
Which Dutch obligation travels with you?
Your AOW build-up stops when you leave, repair is possible within one year
Whoever goes to live outside the Netherlands is usually no longer insured for the AOW and the Anw. Every year you're not insured, you later get 2 percent less AOW.
This is about the build-up, not the payment. The treaty with Paraguay changes nothing about that. What you built up until you leave stays. With a voluntary insurance with the SVB you close the gap. For that you have one year from the moment you're no longer insured. That applies to each of a couple separately.
- reduction per uninsured year
- 2% of your AOW
- registering voluntary insurance
- within 1 year
Your Dutch basic insurance ends on deregistration
Your basic insurance stops on the day you deregister. Your new policy only starts once the insurer has accepted you.
Without the CAK there's no safety net. If you postpone the insurance question until after the move, an insurer can refuse you or exclude things. So arrange your cover first, and only then take steps you can't undo. Make sure there's not a day between the end date in the Netherlands and your first insured day.
Where this comes from: The treaty-country list for healthcare (no CAK route) and the fixed emigration rule that the Zvw ends on deregistration.
Read the whole storyThis is not tax advice
These are the rules that apply to your situation. What they add up to is not shown here. With Paraguay the three treaties each turn out differently. There's no tax treaty: the Netherlands keeps taxing your AOW, your pension and your annuity, and you get no tax credit. Paraguay only taxes income from Paraguay; a Dutch pension, your AOW and your interest at a Dutch bank don't fall under it according to the law. There is a treaty on the export of benefits: even a single person keeps the full AOW. And there's no healthcare treaty: no CAK, but a policy of your own or, if you work as an employee, the IPS. Which combination you have decides your net monthly income. Take this list to a tax adviser who knows both countries.
Still deciding between countries? Put the rules of two or three countries side by side
Then actually doing it
Knowing which rules apply is the first half. The second is applying them in time: in the right order, without missing a deadline, and with your documents at hand.
Every step on one list, free
Not ready to start yet? Then you get the departure checklist for Paraguay: every step in order, to print and tick off. With it, five mails in a week and a half about the pitfalls and the real costs. If the rules for Paraguay change, you'll hear about it. After that we ask once where your plans stand, and now and then we send one thing that fits your moment. No newsletter, and you can switch it off at any time.