US Expats in Greece: Article 5B, FTC vs FEIE & Complete 2026 Tax Guide

Greece attracts US retirees and remote workers with its climate, cost of living, and — most loudly advertised — a 7% flat tax on foreign-source income for qualifying pensioners under Article 5B of the Greek Income Tax Code. That regime is real and can be genuinely valuable. But it works differently for US citizens than for everyone else: because the US taxes its citizens on worldwide income regardless of residency, US citizens can't simply pay 7% and be done with it. Understanding what Article 5B actually does for your total tax burden — and when it helps and when it doesn't — is the starting point for serious planning.

1. The Core Tax Decision: FTC vs FEIE at Greek Rates

Two mechanisms protect US citizens abroad from double taxation on earned income:

• Foreign Earned Income Exclusion (FEIE, Form 2555) — excludes up to $132,900 of foreign earned income from US gross income (2026 limit).⁵ Does not reduce Greek tax. Does not help with investment income or pensions.
• Foreign Tax Credit (FTC, Form 1116) — credits Greek taxes paid against your US tax liability, dollar for dollar, on the same income.⁶

Greek Income Tax Brackets (2026)

Greece reduced most brackets by 2 percentage points effective January 2026:¹

For US citizens working in Greece with earned income above €40,000, Greek rates (39–44%) typically exceed the corresponding US liability on the same income. The FTC fully offsets US tax at those levels and may produce excess credits to carry forward up to 10 years. At lower income levels (under ~€30,000), the analysis is closer — use our FEIE vs FTC calculator to model your specific situation.

One scenario where FEIE wins in Greece: a US digital nomad or remote worker earning only foreign income below the $132,900 FEIE limit who has minimal Greek-source income. If your effective Greek rate (across the 9–26% lower brackets) runs below your US marginal rate, FEIE can eliminate more US tax than FTC. But FEIE has traps: it eliminates IRA contribution eligibility for excluded income, it doesn't reduce self-employment tax under §1402(a)(8), and the 5-year revocation freeze makes it hard to switch back to FTC. If there's any chance your income will grow above the FEIE limit, starting with FTC is safer.

For retirees with pension and investment income: FEIE only covers "earned income" (wages and self-employment). Social Security, IRA distributions, dividends, interest, and rental income are not earned income — they can't be excluded under FEIE. The only tool for passive and retirement income is the FTC (or the Article 5B regime described below).

2. Article 5B: The 7% Pensioner Flat Tax — What It Actually Means for US Citizens

How Article 5B Works for Non-US Retirees

Article 5B of the Greek Income Tax Code (Law 4172/2013, as amended) offers a special regime for foreign pensioners who transfer their tax residency to Greece. Qualifying individuals pay a flat 7% on all foreign-source income — pensions, dividends, interest, foreign rental income, capital gains from abroad — for up to 15 tax years. Instead of filing a full Greek return for that income, they pay the 7% as a lump sum by the last business day of July each year. Any Greek-source income (Greek rental income, Greek employment) is still taxed at standard brackets and reported separately.²

For a British, German, or French retiree, this is genuinely transformative: a €150,000/year pension income that would face €50,000+ in standard Greek tax now costs €10,500. Done. That's why Article 5B gets so much press.

The US Citizen Version: A Different Calculation

US citizens are taxed on worldwide income regardless of residency. Electing Article 5B doesn't change that. What changes is the Greek-side tax — and that matters, because the 7% Greek tax is creditable on your US return as a foreign income tax.

Here's how the math works for a US citizen retiree under Article 5B:

The conclusion: Article 5B reduces total tax from "max(Greek rate, US rate)" to "US rate." A British pensioner paying 7% saves enormous sums vs their home country's 40%+ tax. A US pensioner paying 7% in Greece still pays roughly their normal US effective rate — but saves the premium over that rate that standard Greek brackets would have imposed.

For a retiree in the US 22–24% bracket with €100,000–€200,000 of foreign income, Article 5B can reduce total annual taxes by €5,000–€30,000 versus paying standard Greek rates without the election. That's real money, even if the headline "7% flat tax" is misleading for Americans.

Article 5B Eligibility Requirements

To elect Article 5B, you must:²

1. Transfer your tax residency to Greece (spend more than 183 days/year in Greece).
2. Not have been a Greek tax resident in at least 5 of the 6 tax years immediately preceding the year of application.
3. Transfer from a country that has a tax cooperation agreement (tax treaty or exchange-of-information agreement) with Greece. The US qualifies under the 1950 US-Greece income tax treaty.
4. Provide proof of pension income received from abroad — documentation from your pension fund, insurer, Social Security, or employer confirming the pension payment.

The election is made by March 31 of the relevant tax year. The 15-year clock starts from the year following the application. The regime can be lost if you fail to meet the residency test in a given year or if Greece's government repeals it (though it has been in continuous operation since 2020).

Article 5A (Non-Dom Lump Sum) — For Ultra-High Income

There is a separate Article 5A regime that caps Greek tax on all foreign-source income at a flat €500,000 per year regardless of income amount — designed for ultra-high-net-worth individuals. If your annual foreign income exceeds roughly €7 million (where 7% would exceed €500,000), Article 5A becomes more advantageous than 5B. For most US expat retirees, Article 5B is the relevant regime.

3. US-Greece Totalization Agreement: Good News for the Self-Employed

The US and Greece have a Totalization Agreement in force since 1994 — one of the better planning facts for US citizens moving to Greece.³

• Self-employed US citizens working in Greece typically pay into the Greek EFKA social insurance system only — not US Social Security — during their Greek residency. This eliminates the double SE-tax burden that afflicts US expats in countries without a totalization agreement (India, UAE, Singapore, Brazil).
• Employed workers pay into whichever country's system covers them based on the nature of their employment; a Certificate of Coverage from SSA or the Greek EFKA formalizes this.
• Benefit eligibility: Contribution periods in Greece and the US can be combined to establish eligibility for Social Security and EFKA benefits in either country.
• WEP/GPO: The Social Security Fairness Act (signed January 5, 2025) repealed the Windfall Elimination Provision and Government Pension Offset. US citizens who also receive EFKA pensions no longer have their Social Security benefits reduced under those rules.

Note: the Totalization Agreement covers social insurance only — not income taxes. It does not reduce your Greek income tax or US income tax liability.

4. EFKA and Greek Pension Products: PFIC Exposure

Greece's main social insurance fund is EFKA (Ενιαίος Φορέας Κοινωνικής Ασφάλισης, the Unified Social Security Entity). EFKA is a government-administered mandatory system — not a PFIC. Contributions made while covered under the totalization agreement go toward EFKA benefits and are treated similarly to Social Security for US reporting purposes.

Greek supplementary and occupational pension funds present different risks:

• Supplementary pension funds (TEAEKE, EAEKT, sectoral funds): These are employer-funded plans. If your employer contributes to a Greek occupational fund on your behalf, those contributions may be taxable US income under IRC §402(b) in the year they vest — not at distribution. Track vesting schedules carefully.
• Greek mutual funds (ΑΕΔΑΚ — Greek UCITS funds, Greek-domiciled ETFs): Any Greek-domiciled or EU-domiciled fund held in a Greek brokerage account is almost certainly a Passive Foreign Investment Company (PFIC) under IRC §1297. Holding these without a Qualified Electing Fund (QEF) or mark-to-market (MTM) election subjects gains to the punitive §1291 excess-distribution regime — ordinary income rates plus compound interest back to the year the gain accrued. See our PFIC tax impact calculator.
• What to hold instead: US-domiciled ETFs (Vanguard, iShares US-registered funds) held in a US brokerage account are not PFICs. You can hold these from Greece without PFIC exposure, reporting the account on FBAR and Form 8938 above applicable thresholds.

5. FBAR and FATCA for Greek Accounts

Standard reporting obligations apply to all Greek financial accounts:⁷

• FBAR (FinCEN 114): required if aggregate foreign account balances (across all countries, not just Greece) exceed $10,000 at any point during the calendar year. Greek bank accounts (Alpha Bank, Piraeus, Eurobank, National Bank of Greece), Greek brokerage accounts, and Greek pension accounts all count.
• Form 8938 (FATCA): required if foreign financial assets exceed $200,000 single / $400,000 MFJ at year-end (or $300K / $600K at any point during the year) for those living abroad. Greek EFKA supplementary accounts and investment accounts go here.
• Greek banks and FATCA: Greece signed a FATCA IGA (Model 1, in force 2014) under which Greek financial institutions report US-accountholder information to the Greek tax authority (AADE), which then shares it with the IRS. Your Greek bank knows you are a US person and is reporting. File FinCEN 114 and Form 8938 independently — the bank's FATCA reporting does not substitute for your personal filing obligation.

6. Greek Real Estate: §121, CGT Suspension, ENFIA, and the Golden Visa

§121 Exclusion — Works for Foreign Primary Residences

The §121 capital gain exclusion ($250,000 single / $500,000 MFJ) applies to the sale of a foreign primary residence, not just US properties. If a Greek home has been your primary residence for at least 2 of the 5 years preceding sale, the US capital gain (sale price in USD minus original cost in USD) up to the exclusion limit is excluded from US taxable income. Note: only the US gain figures — Greek CGT rules operate independently.

Currency Gain Trap (§988)

If you finance a Greek property purchase with a euro-denominated mortgage, you incur a §988 currency transaction on the debt at sale. If the USD has strengthened against the euro since you took out the mortgage, you have a currency gain — taxable as ordinary income — even if the property itself barely appreciated in euro terms. The §121 exclusion does not shelter this currency gain (it covers only the "real" property gain). Model the currency scenario before purchase.

Greek Capital Gains Tax — Suspended Through 2026

Individual sellers in Greece currently pay no Greek capital gains tax on real estate sales — the 15% CGT has been suspended by the Greek government through December 31, 2026.⁴ Most Greek tax practitioners expect further extension, as reinstatement has been politically difficult. However, this is not guaranteed — sellers planning a sale in early 2027 should monitor whether the suspension is renewed. For US citizens, the absence of a Greek CGT means no FTC is available to offset the US federal capital gains tax on the sale; budget accordingly.

ENFIA: Annual Property Tax

ENFIA (Ενιαίος Φόρος Ιδιοκτησίας Ακινήτων) is an annual tax on the objective value of real estate in Greece. It is generally not creditable on your US return as a foreign tax credit — it is a property/wealth-based levy rather than an income tax, and Form 1116 requires the foreign tax to be an income tax or a tax "in lieu of" income tax. Budget ENFIA as a separate out-of-pocket expense, similar to US local property tax.

Golden Visa

Greece's Golden Visa program grants a 5-year renewable residence permit in exchange for a qualifying investment. Current minimum thresholds (as of August 2024):⁸

• €800,000 minimum real estate investment in Attica (Athens metro), Thessaloniki, Mykonos, Santorini, and islands with a population above 3,100 inhabitants.
• €400,000 minimum in all other areas of Greece.

The Golden Visa grants residency but does not trigger Greek tax residency by itself — you become a Greek tax resident only by spending more than 183 days per year in Greece. If you obtain a Golden Visa and spend less than 183 days in Greece, you are not a Greek tax resident and Article 5B is irrelevant; your worldwide income continues to be taxed solely by the US.

US reporting implications of a Greek Golden Visa property: the property itself is a foreign asset reportable on Form 8938 above applicable thresholds. If you hold the property through a Greek entity (common for investment properties), you may have Form 5471 (foreign corporation) or Form 8865 (foreign partnership) filing obligations. The property also requires FBAR reporting if held through a foreign financial account.

7. The State Tax Trap

Moving to Athens doesn't terminate California or New York state income taxes. Both states tax their former residents on worldwide income until you sever domicile through documented, affirmative steps — changing your driver's license, voter registration, banking, professional relationships, and removing any "permanent place of abode" in the state. California does not recognize the federal FEIE; income excluded on Form 2555 may remain fully taxable in California. See our state residency planning guide for the specific domicile-severance checklist and state-by-state comparison.

8. What to Do Before Moving to Greece

1. Model Article 5B against your actual income. The 7% regime is beneficial if your standard Greek tax liability would exceed your US effective rate. Run the numbers: if your effective Greek rate at standard brackets would be 25–44%, Article 5B likely saves you a meaningful amount. If you have low passive income (under €10K), the savings are smaller. A specialist can run both scenarios against your projected income mix.
2. FEIE vs FTC decision for earned income. If you're working in Greece, model both. Above €30,000–40,000 of earnings, FTC almost always wins. Committing to FEIE triggers the 5-year revocation freeze.
3. Liquidate Greek-domiciled and EU-domiciled investment funds before arrival. If you plan to open a Greek brokerage account, ensure it holds US-domiciled ETFs only. Buying Greek mutual funds or EU UCITS funds creates immediate PFIC exposure. US citizens cannot easily buy US ETFs through Greek retail brokerages due to MiFID/PRIIPs rules — a US-based brokerage maintained from Greece is the cleanest solution.
4. Sever high-tax-state domicile before departure. Document the date of departure, change all registrations, and avoid returning to the state frequently enough to trigger statutory residency rules.
5. Gather 5 years of US tax compliance documentation. Article 5B requires you to certify tax residency transfer from a country with a tax cooperation agreement. More importantly, if you ever consider renunciation or green card abandonment down the road, the §877A covered-expatriate compliance certification requires 5 years of clean US tax and FBAR filing history — non-filers become covered expatriates automatically.
6. Review IRA and 401(k) strategy. If you use FTC (recommended for most Greece-based earners), you retain IRA contribution eligibility as long as you have remaining US taxable earned income after the credit offset. If you've been using FEIE and plan to switch, the year of switch is a planning opportunity for a Roth conversion while bracket room remains.
7. Understand the Greek EFKA enrollment process. Self-employed US citizens in Greece should register with EFKA and obtain a certificate of coverage from the SSA confirming Greek EFKA (not US Social Security) applies to their earnings. This is the mechanism that invokes the totalization agreement's SE tax relief.
8. Currency gain modeling on any property purchase. If you buy Greek property with a euro mortgage, calculate the potential §988 currency gain on the debt at various EUR/USD exchange rate scenarios. This gain is ordinary income and not covered by the §121 exclusion.
9. Check the CGT suspension status before a sale in 2027. The suspension of Greek real estate CGT was confirmed through December 31, 2026. If you plan to sell in 2027 or beyond, confirm whether it has been extended — the 15% rate would apply if the suspension lapses.
10. Evaluate whether the Golden Visa triggers reporting obligations. Even if you don't become a Greek tax resident, a Golden Visa property held through a Greek entity creates Form 5471 or 8865 filing obligations. Simple direct ownership (individual's name) is cleaner from a US reporting standpoint.

What a Greece-Specialist Expat Advisor Handles

• Article 5B application strategy and annual compliance — determining whether to elect, timing the application, and handling the annual lump-sum payment
• FEIE vs FTC modeling for your specific income mix (earned vs passive vs pension)
• Portfolio construction: ensuring your Greek investment accounts hold only non-PFIC instruments
• EFKA totalization enrollment and SSA Certificate of Coverage coordination for the self-employed
• Greek property purchase: §121 planning, currency gain modeling, entity structure for Golden Visa properties
• FBAR, Form 8938, and any Form 5471/8865 for Greek entities
• State domicile severance documentation
• Coordination with a Greek CPA on the Greek-side return (Article 5B lump sum and Greek-source income)

1. Greek Income Tax Code (Law 4172/2013) as amended for 2026. Tax brackets 9%/20%/26%/34%/39%/44% confirmed per Euronews (January 6, 2026) and TaxRavens Greece personal taxation guide. All brackets except the base 9% reduced by 2pp from January 2026. taxravens.com — Greece Personal Income Tax 2026
2. Article 5B, Greek Income Tax Code (Law 4172/2013, as amended by Law 4646/2019 and subsequent). 7% flat tax on foreign-source income for qualifying foreign pensioners; 15-year term; eligibility requirements. Confirmed via PwC Tax Summaries Greece and Step Law Firm Greece. taxsummaries.pwc.com — Greece Tax Credits and Incentives
3. US-Greece Totalization Agreement (entered into force 1994). Prevents dual Social Security contributions; allows US/Greek contribution periods to be combined for benefit eligibility. ssa.gov — International Social Security Agreements
4. Greek Capital Gains Tax on real estate sales by individuals suspended through December 31, 2026. Confirmed via Elxis (Greek property law firm) and RSM Greece. Standard rate of 15% will apply when suspension expires. elxis.com — Capital Gains Tax in Greece
5. IRS Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. 2026 FEIE limit $132,900 per IRS Rev. Proc. 2025-67. irs.gov/publications/p54
6. IRC §901–§905; IRS Form 1116 Instructions (2026). Foreign Tax Credit framework and limitation formula. irs.gov/forms-pubs/about-form-1116
7. FinCEN Form 114 Instructions; IRC §6038D (Form 8938). FATCA IGA Model 1 between US and Greece in force 2014. bsaefiling.fincen.treas.gov — FBAR filing
8. Greek Golden Visa investment thresholds raised effective August 2024. €800,000 minimum in Attica, Thessaloniki, Mykonos, Santorini, and islands >3,100 population; €400,000 elsewhere. Confirmed via Greek government and immigration practitioners. immigrantinvest.com — Greece Non-Dom Taxes

Tax values verified as of June 2026 using IRS, PWC, SSA, and Greek tax authority sources. Greek rates are for the 2026 Greek tax year. US values are for US tax year 2026. Article 5B regime verified as active; legislation subject to change.