AOW, pension and tax in Canada: 15% stays in the Netherlands, and what you must record on day one

Canada is on the Dutch list of treaty countries, and that saves you money right away. But the tax treaty works out differently than with the European destinations, and one arrangement that EU emigrants keep doesn't apply here.

Your AOW: in full, and in dollars

Because the Netherlands has a treaty with Canada, your AOW (the Dutch state pension) stays fully intact. That isn't a given: outside treaty countries a single person drops from 70% to the married level of 50% — a reduction that does not apply here. Whoever lives alone in Canada keeps the full single person's pension.

The SVB pays out in Canadian dollars, not in euros. Your net amount therefore moves with the exchange rate, which works out well in a good year and badly in a bad one. Don't count on it as a fixed amount.

What does change is the accrual: it stops on your date of departure, and every missed year costs 2%. You can insure yourself voluntarily, but then you have to register within one year of departure. Weigh that against what it costs (17.9% of your income, with in 2026 a minimum of € 569 and a maximum of € 5,693) and against what you build up in Canada itself.

Because that last part counts. The social security agreement ensures that your Dutch insurance years count towards the Canadian state pension. That matters above all for the requirement of twenty years' residence that applies if you would want to live outside Canada again in your old age. One warning: if you work in Quebec, you accrue in the Quebec system, which falls outside this agreement and has a route of its own.

The tax: the Netherlands withholds 15%

Here Canada differs from Germany and resembles Switzerland. The treaty lets the Netherlands keep a withholding tax of at most 15% on pension, annuities and social security benefits such as the AOW — and unlike with Germany there is no threshold amount. It applies from the first euro.

Canada then taxes you as country of residence on your world income and credits what the Netherlands already withheld, so you don't pay twice. It is good to know, though, that an exemption declaration from the Belastingdienst doesn't lead to zero here as it does in some other countries: the realistic outcome is a reduction to that 15%.

Two things that often go wrong. A government pension (ABP from a public position) falls under the same rule with Canada — so also at most 15%, and not fully taxed in the Netherlands as under many other treaties. And with a lump-sum surrender the ceiling lapses: the Netherlands may tax that in full. If you're considering surrendering a small pension, do so with that fact in mind.

What you lose: the deductions

This is the point at which Canada works out more expensive than an EU destination. The qualifying non-resident taxpayer status — the arrangement whereby emigrants keep their Dutch deductions and tax credits if they have at least 90% of their income taxed in the Netherlands — applies only to the EU, the EEA, Switzerland and the BES islands. Canada falls outside that, and there is no residual category.

Concretely: no mortgage interest relief and no tax component of the tax credits. What remains is the entrepreneur's allowance for a Dutch business and the tax-free allowance in box 3. If you keep a home in the Netherlands, it stays taxed here — property in the Netherlands always is — but the interest relief you were counting on isn't there.

The action of day one

Now the point that is in no Dutch emigration guide and that can be worth thousands of euros.

On the day you become a tax resident of Canada, the Canadian tax authority treats your assets as if you had bought them that day at the market value of that moment. All appreciation from before your arrival thereby falls outside Canadian tax. If you later sell your Dutch investment portfolio, Canada only settles on the growth after your arrival.

But that only works if you can prove that value. So on your day of arrival, record what your shares, your art, your collection and your other possessions are worth — with a printout, a valuation or a bank statement. The Canadian tax authority itself says you have to keep that.

That same figure does something else: it determines whether you fall under the annual reporting obligation for foreign assets, which applies above CAD 100,000. Two pleasant exceptions there: in your year of arrival you don't have to report anything yet, and a Dutch house you use exclusively yourself doesn't count. If you let it, it does count. And failure carries hefty penalties, so put that report in your diary next to the tax return of 30 April.