Retirement Benefit, Pensions and Social Insurance Payments
(1) Reserving Paragraph (2) of Article 18, retirement benefits and similar compensations which are paid to a person who is resident in a Contracting State, as well as pensions, which are paid to a person resident in a Contracting State, are only taxed in this State. Retirement benefit and other payments that are paid in the framework of the providential benefits of a social security system of one Contracting State to a person resident in the other Contracting State can only be taxed in the other State.
(2) Irrespective of Paragraph (1), the retirement benefit or a similar compensation as well as a pension or a retirement benefit paid out under the provision of a social benefits insurance systems of a Contracting State (social benefits pension) will also be taxed in the Contracting State, from which they are drawn according to the law of this State if the total gross amount exceeds the sum of 15,000 Euros in a calendar year.
(3) irrespective of Paragraphs (1) and (2), a payment which is paid out under the provisions of the social benefits system of a Contracting State and is not a social benefits insurance pension, can also be taxed in this State.
(4) If this retirement benefit or this similar compensation or pension or social benefits insurance pension is not of a regular recurrent nature, the earnings can also be taxed in the Contracting State from which they are drawn irrespective of Paragraphs (1) and (2).
(5) Recurring and one-time payments which a Contracting State or one of its geopolitical sub-units pays compensation to a person resident in the other Contracting State for political persecution or injustice or damages arising from acts of war (including reparations payments) or military or civil service or for a crime, or from a vaccination or any similar event, can only be taxed in the former State irrespective of Paragraphs (1) to (4).
(6) Retirement benefit or a similar compensation or pension is deemed drawn from a Contracting State to the extent that amounts or payments connected to the retirement benefit or similar compensation or pension or which lead to earned claims in this State to a tax concession. The transfer of a retirement benefit or similar compensation or a pension from a pension fund or insurance corporation in a Contracting State to a pension funds or an insurance corporation in another State does not restrict the taxation rights of the State named in Sentence (1).
(7) The responsible authorities of the Contracting States will decide in mutual consultation how Paragraph (2) is to be applied. Additionally, they will decide which disclosures a person resident in one Contracting State must submit for the proper application of the agreement in the other Contracting State, specifically for determining if the precondition named in Paragraph (2) is fulfilled.
(8) The term “pension” means:
- (a) In the case of the Netherlands, a pension in the sense of Dutch tax law whose payments are part of the taxable income from work and residential properties ("taxable income from work and residential property");
- (b) In the case of the Federal Republic of Germany, a specific amount which is to be paid at regular intervals life-long or during a specific or determinable time period based on an obligation, which provides these payments as a counter-consideration for proportional and complete performances that were affected in money or monetary equivalent value.