AOW, pension and tax in China: the treaty that doesn't quite do enough

There is a social security treaty between the Netherlands and China, and China is neatly on the SVB's list of treaty countries. Whoever concludes from that that their AOW (the Dutch state pension) travels along safely walks into the best-hidden pitfall of this corridor. This article sets out what the treaty does and doesn't do — and what the tax authorities on both sides expect of you.

The AOW: the list says yes, the treaty says no

The 2017 treaty arranges no export of benefits — the explanatory memorandum says so in so many words, and the minister confirmed in 2024 that the Netherlands exports the full AOW to all treaty countries "with the exception of China and Pakistan". Concretely: the AOW itself you get anywhere in the world, but outside the export countries the married person's rate applies. A couple notices nothing of that (twice 50%), but a single person drops permanently from 70% to 50% — at current amounts hundreds of euros a month, for as long as you live there. Whoever leaves for China as a single person later in life must have this figure in their pension plan.

For accrual the usual story applies: every year outside the Netherlands is 2% less AOW, and voluntary insurance (apply within one year of leaving, a maximum of ten years) can close that gap at 17.9% of your income with a minimum of about € 569 a year.

What the treaty does do well: posting

The treaty was made to stop double contributions, and it does that. Whoever is posted by a Dutch employer stays under the Dutch system for a maximum of sixty months and is exempt in China from the contributions for the basic pension and unemployment insurance — with a Certificate of Coverage from the SVB as proof. Whoever signs locally with a Chinese employer gets nothing out of it: then the country-of-work principle applies and you simply pay the Chinese social contributions. One consolation at the end: the employee's share of your Chinese pension contribution (8%) sits in an individual account and is paid out in one go on request when you leave for good.

The tax treaty: the Netherlands keeps levying

The 2013 treaty has a double sting in Article 18. On social security benefits — so the AOW too — the Netherlands levies exclusively. And on pension and annuity built up with Dutch tax relief, the Netherlands may also levy — so don't expect an exemption from wage tax as with pure residence-state treaties. Note: the treaty applies only to mainland China; Hong Kong has a treaty of its own and Macau none at all.

Alongside that the familiar departure points: the protective assessment on pension, annuity and substantial-interest assets has no automatic deferral outside the EU — you apply for it and provide security — and qualifying non-resident taxpayer status lapses, so no more mortgage interest deduction on a home you keep.

The Chinese side: the six-year rule and the 30-day reset

China taxes newcomers mildly: in the first years you pay tax there only on Chinese income. Only whoever has been in China for 183 days or more in each of six consecutive years is taxed on their worldwide income — and one continuous stay abroad of more than thirty days sets that counter back to zero. For whoever has Dutch assets or rental income, the long summer holiday is therefore also a tax instrument. On top of that, the classic expat allowances (rent, school fees, flights home) can still be reimbursed tax-free up to and including 31 December 2027; what comes after that is uncertain.

How the AOW rate, Article 18, the protective assessment and the six-year rule exactly come together for you is the one conversation with a tax adviser who knows both countries that really pays off here — the difference runs into thousands of euros a year.

In Vertrekklaar this is phase 3 of 5 of the journey: the same steps, but for your situation — in your order, tickable, and with the deadlines watched. See the whole journey to China.