5 Best US Tax Treaties in Europe for Americans in 2026: How France, Spain, Italy, Greece, and Portugal Tax Your Pension and Social Security

Europe is where your money goes to die. Yet thanks to some often-overlooked treaties, these governments tax their residents at up to 50% but collect almost nothing from US citizens living there. In this video, you'll learn how double tax treaties work, how you can get residency in these 5 popular destinations, and what you may be looking at in terms of taxes while living there.

Two quick notes. One: Don't take notes and don't get confused about this info. We summarized all 5 of these treaties into a free comprehensive guide, and you can download it at freedomfiles.co/guide/us-european-tax-treaties.

And two: I'm not a financial or tax adviser, and nothing here is a recommendation. We help Americans move to or invest in these 5 countries every month, and we work with licensed tax teams in all 40 or so countries where we offer services, so this video is our informational read of the conventions. Consult our tax partners before making any big moves.

Now, what most Americans think is that moving to Europe means giving up half of their income to these governments. But because of the tax treaties we'll discuss, you end up giving Uncle Sam his share and minimal income to this second European country.

A tax treaty does one job. It decides, if you're a tax resident in both countries, which country gets to tax which kind of income. If you're a US citizen, recall that America will always want its taxes. There's a name for that, by the way. It's called the saving clause. Almost every US tax treaty contains one, and it preserves Washington's right to tax its own citizens as if the treaty had never come into effect. Which sounds like it defeats the purpose of signing a treaty at all. Except each treaty then writes exceptions to its own saving clause, and the exceptions are where the value is. Re-sourcing is an exception. So when I say one of these 5 is more generous than the others, what I mean is that it carved more out of its own saving clause than the rest.

If you move abroad and become a tax resident in another country, that second country will also want taxes from you. But these treaties assign responsibility between those two governments for each kind of income you have: Your salary, dividends, pension, Social Security, capital gains, et cetera. Sometimes you'll owe tax only to the government where you live, sometimes to where the income is made (in this case, the US), and sometimes to both, with a credit on one side to cancel the overlapping tax bill. That last piece is often forgotten: The foreign tax credit, Form 1116 on your US return, gives you a dollar of US tax relief for every dollar of income tax you pay to a foreign country, generally up to the US tax on that same income.

Say you move to Europe, become a tax resident of a country, and owe that government $70,000 of income tax where the US would have charged you $50,000. The foreign tax payment cancels the US bill on that income, and the extra $20,000 of credit rolls forward for up to 10 years. Your US tax on that income comes to zero because you already paid more somewhere else.

So write this down: You don't pay both governments on the same dollar. You pay the higher of the two. If the European rate is higher, that country collects and your US bill on that income drops to zero. If the US rate is higher, the foreign credit covers most of it and you send the IRS the difference. Either way, your total is the bigger of the two numbers, never the sum. So the question in every country below is which government gets first claim on each piece of your income, and whose rate is higher once it does.

There's one more piece that makes all of this function, and almost nobody explains it. A foreign tax credit requires foreign income. But if you're living in Lisbon while your money comes out of a US brokerage account and a US pension plan, that income is US-source, so on paper the credit shouldn't apply at all. Which is why 4 of these 5 treaties include a re-sourcing rule that deems your US income foreign, purely so your credit works.

You'll hear 183 days quoted as the line that makes you a tax resident somewhere, and that's right as far as each country's own law goes. But when both countries claim you at the same time, the treaty settles it. It opens by asking where you have a permanent home available to you. If you have a home available in both countries, the treaty looks at where your personal and economic ties are closer: Family, work, where you bank, where you manage your property, et cetera. Only after that does it get to habitual abode. So don't plan on day count alone; it's a bit more complicated than that.

Now what's critical for your understanding is how the treaty decides who taxes you and who doesn't. And that's what we're covering in these 5 popular European destinations. So if you're weighing a couple of these countries against each other, take the Plan B Blueprint at freedomfiles.co/begin and get a free one-on-one with yours truly. It's 10 quick questions, and you'll get a custom outline of the residencies and citizenships that fit your goals, whether they're in Europe, Latin America, or Asia.

All right. Portugal first.

The tax treaty between the US and Portugal dates back to 1994 and hasn't been touched since. For 15 years this treaty was nearly irrelevant, because if you qualified, the Non-Habitual Resident special tax regime exempted foreign income from the Portuguese tax net. But sadly, NHR closed to new applicants. So if you move to Portugal and spend more than 183 days per year there, a 30-year-old treaty now decides your tax bill.

Article 20-1-A gives the tax on your private pension to Portugal. But we have very few clients with a private pension; that's much more a European thing than an American one. IFICI, the less useful successor regime to NHR, does not shelter pension income. Portuguese personal income tax runs up to 48%, with a solidarity surcharge of 2.5% above €80,000 and 5% above €250,000, no matter where that income is earned, banked, or invested. So the effective Portuguese rate on retirement income can pass 40%. If you were sold Portugal as a retirement tax haven, that version of Portugal is gone.

Now, if your pension is a federal, military, or foreign-service pension, the treaty assigns it to the United States alone. Portugal cannot tax it at all. For a retired colonel or a career federal employee, that one article is usually the largest line on the return, and it holds in Portugal, Italy, Spain, and France. Greece is the exception, and I'll explain why in a minute.

On Social Security, Article 20-1-B of the treaty lets the United States tax it without excluding Portugal, so both countries tax it and Portugal relieves the overlap with a credit. Article 14 leaves securities gains with the country of residence, so your US brokerage gains get taxed in Portugal at 28%.

For a founder, a researcher, or an IT professional inside the new but narrow IFICI special tax regime, this treaty is rendered mostly useless, because IFICI exempts most foreign income for just a few qualifying professions. Which is why our client conversations about Portugal now open with whether your work fits that specific list.

Now, if you do qualify, or if the high Portuguese taxes aren't a big deal to you, how do you move to Portugal? You have a few options.

The Golden Visa requires either €250,000 in a cultural-heritage donation or €500,000 into a regulated Portuguese fund, recoverable at maturity in 8 to 10 years. Property routes closed in 2023. What's unique about Portugal's golden visa is the lack of required presence: Just 7 days in year one and 14 days every two years after that, the lightest day count in the EU that can still qualify you for citizenship down the road. More on that in a second. As you can see, this golden visa doesn't require you to move to Portugal, so if you want citizenship here or just residency in Europe, you can get it in Portugal without becoming a tax resident and spending more than 6 months a year there. The D7 retirement visa needs proof of only €920 a month of passive income, the lowest financial bar of any EU residency with a path to a passport. And finally, the D8 digital nomad visa requires active work income of about €3,000 a month. These two D visas require you to move to Portugal and become a tax resident in order to renew your visa.

In 2026, Portugal doubled the naturalization timeline from 5 years to 10, and moved the start of that clock to the day the immigration authorities issue your residence card, not the day you file, as it used to be. AIMA's backlog is 30 to 45 months for a Golden Visa residency card. Add about a year of naturalization processing, and the investment-to-passport timeline is roughly 13 to 15 years. Quite different from what this program looked like just a few years ago.

If residency with minimal time on the ground is what you want, Portugal is excellent, and it always has been. If a passport on a fast timeline is the goal, we generally recommend you look elsewhere. And remember: If your profession fits the narrow IFICI list, Portugal comes right back onto the shortlist.

Remember that 48% figure. The country I'm saving for last charges 45% tax for non-US citizens, yet collects almost nothing from an American on the same income.

Number 2 is Greece. Pay close attention to the fine print here. The US-Greece convention was signed in Athens in 1950, and it is the oldest US tax treaty in force in the world. It's also never been amended since Eisenhower proclaimed it in the 50s. It even predates the IRA and the 401(k). There's no capital gains article, no limitation on benefits, no arbitration, and no re-sourcing rule for an American citizen living in Greece.

And that missing re-sourcing rule is the mechanism I described earlier, the one that lets your foreign tax credit apply to US-source income. Portugal, Spain, and Italy all wrote it into their conventions. Greece never did, because in 1950 nobody imagined an American living in Athens off a US brokerage account.

Then there's Article 14, paragraph 1. It lets both the US and Greece tax their own tax residents as though the convention had never come into effect. That one sentence overrides most of the exemptions inside the treaty. Article 11 exempts private pensions and annuities where they arise, and 14-1 takes it back for a resident. The treaty points your federal pension to the US, but 14-1 can override it once you're a Greek resident. So if you have a federal pension and you're eyeing Greece, get a written position from our Greek tax partners before you move.

So having said all this about Greece, why is it on our shortlist at all? Well, its two special tax regimes can make the country quite attractive from a tax standpoint, despite the tax treaty.

If you spend more than 6 months in Greece, the first option is a flat 7% on all foreign income for pensioners and passive income earners who move their tax home to Greece, good for 15 years, applied nationwide, anywhere you want to live. If you're moving with a dependent spouse, you must each qualify independently. What's neat about this special tax regime is that any tax you pay to the IRS can actually credit against that Greek 7%, so the Greek tax bill on that income often comes down close to nothing. By the way, we created a video all about Europe's 15 special tax regimes, including this one, linked at the end of this one. Stay until the end for that.

The second is the non-dom lump sum special tax regime, which requires a €100,000 lump sum tax payment per year covering all foreign income, also for 15 years. Now, read that one with care: There is no credit for what you pay the IRS. You pay Athens €100,000, and you pay Washington in full on the same income. The two bills stack. Additionally, this program requires an investment in the country of at least €500,000, which fits perfectly with the golden visa program.

The Greek Golden Visa residency program requires a contribution of €250,000 in a restored or converted property. Standard residential property is €400,000 outside the prime zones of Athens, Thessaloniki, Mykonos, and Santorini, and €800,000 inside them. There are also a few capital investment options like bonds, investment funds, and startup infusions. Processing typically takes 6 to 12 months, with no minimum presence requirement to maintain the card. So you don't have to become a tax resident in Greece on this golden visa if you don't want to.

Now watch how those two things fit together. While the Golden Visa has no day count, the 7% flat tax regime, the €100,000 lump sum regime, and the 7-year path to a Greek passport all require you to become a Greek tax resident, which means at least 183 days a year in-country. If you're moving to Greece, you have another residency option outside of the golden visa: The FIP retirement visa needs proof of at least €3,500 a month in passive income and pairs naturally with that 7% flat tax regime.

If your income is passive, your pension is private (not federal), and you want to move to Europe, Greece could be a great fit. That's the client who wins here: The passive-income couple moving full time. If you want a Plan B back-pocket residency you don't relocate to but keep for a rainy day, the Golden Visa does that, and none of the tax headlines affect you.

Don't forget: You can access this info, our take on these treaties, and a comparison of all five for zero dollars at the link on your screen now.

Number 3, Italy. The treaty was signed in 1999, spent a decade parked in the US Senate, and took effect in 2010. And it does something almost no other US treaty does.

Article 18-1 allows the country where you live, Italy in this case, to tax your private pension, your IRA, and your 401(k) distributions. Standard enough. Article 18-2 then gives your US Social Security to the country of residence as well. So Italy taxes your Social Security payments. If you're a US and Italian dual citizen, however, only Italy taxes your Social Security. While most US tax treaties make Washington responsible for taxing your Social Security, Italy sends it to Rome. Which makes the government pension carve-out here even more striking. Italy takes your Social Security, but a federal, military, or foreign-service pension goes to the United States alone. Rome cannot touch it. So two payments that look identical in your bank account get opposite treatment under the same convention.

Ordinary Italian tax bands, called IRPEF, charge from 23% to 43%, plus regional and municipal surcharges near 4%, and a flat 26% on dividends and most capital gains. So under the treaty alone, Italy taxes your retirement income at rates up to 43%. Similar to Greece, the Italian tax treaty with the United States is not beneficial for most people. But the domestic special tax regimes are the whole game here.

Italy has two main regimes that our clients are interested in. The southern Italy flat tax regime charges a flat 7% on all foreign-source income, pensions, dividends, capital gains, and rental income, for 10 tax years, if you move your tax residence to a qualifying town in the south with a population of less than 30,000 residents. The population limit was 20,000 until 2026, so now we're talking about towns with regional airports and hospitals, not scant mountain villages. But as you can see, this regime limits your choice of residential address. Cities like Naples, Rome, Milan, or Florence don't fit the bill.

The second option is the lump sum regime, a flat substitute tax on all foreign income for up to 15 years. It was €100,000, then €200,000, and now, in 2026, it's €300,000 a year that covers all your foreign income, no matter how much you make abroad. So it only beats ordinary Italian rates well above a high threshold.

Now the cons. Unlike Greece's flat tax for retirees and passive income earners, if you elect the southern Italy 7% flat tax, Italy gives you no credit for what you pay the IRS. If your source country withholds tax on that pension, you can be taxed on both sides of the same income. And Roth accounts have no Italian equivalent and no treaty definition, so assume Italy taxes the distribution until tax counsel tells you otherwise.

Nevertheless, if Italy is a good fit for your goals, you're wondering how you can move or invest there. The Italian Investor Visa, with no presence requirement, needs an investment of €250,000 into a qualifying innovative startup or €500,000 in business shares. The Investment Committee issues the nulla osta, the no-objection certificate, in about 30 days for clean files, and the investment is only needed after you obtain your visa and complete the immigration process. That's unique as far as European golden visas go. So if you want residency without moving to Italy and without the need to become a tax resident, this is your only option. If you are looking to move to Italy, the Elective Residency route requires proof of at least €32,000 a year of passive foreign income and 183 days on the ground, so this one requires tax residency.

If your income is large enough that a €300,000 flat tax reads as a discount, Italy's lump sum is an efficient tax tool. Not quite as attractive as the Greek non-dom lump sum, but it doesn't require investment in the country like Greece does. If you're a pensioner willing to base yourself in one of those qualifying southern towns, the 7% flat tax can do the job. Those are the two clients who win in Italy, and there isn't much room between them.

Number 4 is Spain, the most current text of these 5. The 1990 convention was modernized by a protocol that spent 6 years in the US Senate and took effect in 2019. It cut source tax on interest and royalties to nothing, set dividend withholding at 5 to 15%, and added mandatory binding arbitration. So a deadlock between the two tax authorities has an exit.

Article 20-1-A gives your private pension, your IRA payments, and your 401(k) distributions to Spain's tax authority, Hacienda, as the country of residence. And Article 21 exempts your federal, military, and other government-service pension, with progression, so it lifts the rate on everything else you earn.

But there's a trap in that exemption, and it's the one place where the tax half of this video collides with the citizenship half. That carve-out generally protects you while you are not a Spanish national. Naturalize, and the taxing right on that government pension can flip to Spain. So a federal retiree who spends 10 years earning a Spanish passport can hand Madrid a pension the treaty had been protecting the whole time. Model that before you start the citizenship path.

Now, Article 20-1-B says US Social Security may be taxed in the United States. The Spanish tax agency reads "may" as non-exclusive and taxes the benefit in Spain with a credit for the US tax. A number of respected firms, and even our partners, typically read it the other way. Nevertheless, binding rulings from the Dirección General de Tributos put the benefit inside Spanish tax. On a significant benefit, that disagreement is worth several thousand euros a year. Every year. For as long as you're a tax resident of Spain. So moving to the country requires a written position from tax counsel before you owe unnecessary payments.

Outside a special tax regime or tax treaty benefits, Spain taxes general income at up to 47%, even higher in some regions like Catalonia, savings income from 19% to 30%, plus a wealth tax and the solidarity levy above €3 million of net worth, no matter where that wealth is banked.

Spain does have one special tax regime called the Beckham Law. I'm sure you can guess who it was named after. If you move to Spain on the digital nomad visa and elect it, Spain taxes you under non-resident rules for six years: A flat 24% on Spanish-source income up to €600,000, and no Spanish tax on your foreign income. For an American billing US clients from a base in Madrid or Valencia, that is close to ideal. But two caveats before you apply. Beckham was built for workers, so it's available only on the Digital Nomad Visa, which requires €2,800 a month of foreign active employment income. The Non-Lucrative Visa, which requires savings of €30,000, gets you access to no special tax regime, so a passive-income mover pays full Spanish rates, depending on the convention's treatment of your specific income mix. And finally, this regime only works for 6 years. After that period, you're back to normal tax rates in Spain.

So Spain splits into two clients: The consultant or remote worker billing US clients under Beckham, and the government retiree living on a pension Madrid cannot touch. If you're neither of those, Spain gets expensive fast.

If you were born a citizen of a Latin American country or have citizenship by descent from a former Spanish colony, citizenship in Spain requires just two years of residency to qualify. Quite the opportunity to get citizenship for yourself and your family and pay low Spanish taxes under the Beckham Law regime, then get the hell out before normal rates apply. For others, the timeline is 10 years, and the tax rates can be horrendous.

Finally, number 5 is France, with perhaps the most attractive US tax treaty worldwide. Let's start with the sticker price and work our way down. France taxes its tax residents on worldwide income at rates of up to 45%, adds a further 3% and 4% surcharge on high incomes, and social charges of up to 17.2% on investment income. With these additional charges, the headline tax bill is likely the heaviest in this video.

But in comes the powerful US-France tax treaty. Let's look at Article 24. For a US citizen who becomes a French tax resident by living there for more than 6 months a year, France computes tax on your US dividends, interest, and gains on listed US securities, and then grants you a credit equal to that same French tax. So the two numbers cancel each other out, and your French tax bill on that income comes to zero. That credit also removes the social charges from the same income.

So in France, there's no need for a special regime, an address in a tiny village, or a 15-year countdown until tax hell hits. The convention itself does the trick, indefinitely.

Now, it gets better. Article 18 does the same job for retirement income. Your US pensions, IRA and 401(k) distributions, and US Social Security are taxable only in the United States. France does not touch them. Remember Italy taxing your Social Security in Rome, and Spain arguing about it in front of the Dirección General de Tributos? France throws it all back to the US government. So a qualified Roth distribution is untaxed on both sides, the US and France, and France is the only one of these 5 where that's the case. Your federal, military, or foreign-service pension is US-only here too, so France gives you the pension carve-out and the portfolio treatment in the same convention.

So an American living in Paris on a US investment portfolio and retirement accounts can pay France close to nothing, if not zero, on that income, in the country with probably the worst tax reputation in this video. That's the client who wins in France: Portfolio, retirement accounts, and a passport goal.

Now, there is a tradeoff. That credit we mentioned gets claimed on French forms every single year, through a specific declaration called a mention expresse. An accountant who has never prepared a return for an American will miss it, so you must work with experienced international counsel for this to work. Again, we have a French tax team here at the Freedom Files. Also, Article 24 covers defined categories only. Gains on US property, most trust distributions, and business profits fall outside of it and face full French rates. And the IFI wealth tax applies to property above €1.3 million, though non-French property is exempt for the first 5 years.

And one more, which is brand new. Just this year, the Federal Circuit ruled that foreign tax credits cannot be applied against the 3.8% Net Investment Income Tax. That reversed two lower court decisions that had gone the other way, and France was one of the countries at the center of those cases. So on your investment income, that 3.8% survives regardless of what France collects or doesn't. It's a small number next to a 45% headline, and it is the one piece of your US bill that even this treaty cannot cancel.

So that's the tax front. If you want residency in France, how do you get it? Two routes, both on the same 5-year clock to qualification for a French passport, which is the fastest of these 5 by a wide margin. Greece is 7 years. Italy and Spain are 10. Portugal is 13 to 15 in practice.

The Passeport Talent requires a €300,000 commitment into a French operating business and processes in just a few months, and it doesn't require any presence in France, so no tax residency required either. The long-stay visitor visa, France's permit for people living on foreign income, requires about €20,000 per applicant in documented liquid savings, plus an undertaking to take no French employment. Once you're present in France for more than, let's say, 8 months per year for 5 years, you can qualify for permanent residency and citizenship. Year 5 is when you file the naturalization petition, not when the passport arrives. Add 12 to 24 months at the Ministry of the Interior, a B1 French exam, and a civics interview. So plan on 6 to 7 years from your first card to a passport in your hand.

If your income is predominantly an investment portfolio, retirement distributions, and Social Security, and you want an EU passport in under a decade, France may be the strongest fit in Europe. And I don't say that lightly.

So here's the pattern. The older the text, the less protection you get, and Greece proves it: A 1950 convention with no capital gains article and an override clause that cancels most of its own exemptions.

In 4 of these 5, the treaty is only the floor. The rate on your return comes from domestic law layered on top, and domestic law is what a future government can amend without notice. That can become friendlier or less friendly with time. The Freedom Files' bet is the latter, as these countries plunge deeper and deeper into debt.

France is the one where tax protection lives inside the convention. Amending a treaty takes the two governments and US Senate approval. No changes to that agreement are coming any time soon.

If you want all this info side by side, the last page of that free tax treaties guide compares these conventions across 15 measures: Residence triggers, where your private pension goes, where your Social Security goes, and more. Download it at freedomfiles.co/guide/us-european-tax-treaties.

So you're going to wonder how these affect your unique income mix, and which is best for you. I can't answer that from here. Your income mix decides it. A US portfolio with IRA distributions points one direction. Active consulting income from US clients points another. Change one input, and the best country on this list changes with it.

If you're interested in getting residency in Europe and doing so in the most efficient way possible, we work with clients in two ways. If you want a simple residency or citizenship in a single country, we can help you from start to finish. If you're building something bigger across borders, with multiple residencies, multiple citizenships, banking, structures, and the tax layer underneath all of it, that's a private client engagement, and we quarterback the whole thing. We work in 42 countries and have helped hundreds of people do exactly this.

Either way, contact us at freedomfiles.co/contact. Book a consult with us or take the Plan B Blueprint. Subscribe as well, so you don't miss our next video in excruciating detail like this one.

And on the rate side of this whole tax equation, we made a comprehensive video about the 15 special tax regimes across Europe and how you qualify for each one. That's on your screen right now. Talk to you soon, and thanks again for watching.