The United States and Greece have an income tax treaty and a Social Security agreement, which can help prevent double taxation for Americans living in Greece. However, US citizens must still report their worldwide income to the IRS. Complex US reporting rules often apply to Greek retirement plans, investments, and businesses, making compliance a detailed process.
US filing basics every American abroad must know
US citizens and green-card holders are taxed on worldwide income wherever they live, and usually must file Form 1040 once gross income exceeds the IRS threshold ($15,750 for single filers, $31,500 for married filing jointly, and $23,625 for head of household for 2025), even when no tax is ultimately due. The tools that reduce double taxation are the Foreign Earned Income Exclusion (FEIE, up to $130,000 for 2025 under IRC §911) and the Foreign Tax Credit. Neither is automatic. The FEIE requires a tax home in a foreign country plus either the bona fide residence test or 330 full days abroad in a 12-month period, and it reaches earned income only. The Foreign Tax Credit is figured separately for each income category under IRC §904 and is capped at the US tax on the foreign income in that category, so it reduces double taxation without guaranteeing that none remains.
Two reporting rules catch most filers in Greece: the FBAR (FinCEN Form 114), required when foreign financial accounts exceed $10,000 in aggregate at any point in the year, and Form 8938 (FATCA) for specified foreign assets above the applicable threshold. Both can carry penalties even when no tax is owed. If you are behind, the Streamlined Filing Compliance Procedures are the usual path back for non-willful taxpayers. They run on two tracks: the foreign track carries no offshore penalty but requires meeting the program's non-residency test, and the domestic track carries a 5% offshore penalty but works through amended returns, so it does not fit someone who never filed at all. Tax and interest on the catch-up years are owed whichever route applies.
US tax treaty with Greece
The US-Greece income tax treaty, in effect since 1953, aims to prevent double taxation. However, its 'saving clause' in Article XIV(1) allows the US to continue taxing its citizens as if the treaty did not exist. For most US citizens in Greece, the treaty's primary practical benefits are reduced withholding taxes on certain income types paid from one country to a resident of the other. The main tool for avoiding double taxation on income is the Foreign Tax Credit, not the treaty itself.
Article XIV(1) (Saving clause).
The United States reserves the right to tax its citizens and residents on their worldwide income, regardless of other treaty provisions. This clause is why US citizens in Greece must still file a US tax return and cannot use the treaty to exempt most income from US tax.
Article IX (Dividends).
Article IX exempts dividends and interest paid by a Greek corporation from US tax, except where the recipient is a citizen, resident, or corporation of the United States, which excludes most readers of this page. It sets no reduced rate for US-source dividends paid to a resident of Greece, so the domestic withholding rate of the source country applies and the US statutory rate of 30% is not reduced by this treaty.
Article VI (Interest).
Interest from Greek sources received by a resident or corporation of the United States is exempt from Greek tax, but the exemption is narrow. It reaches only interest that does not exceed 9% per annum, it requires that the recipient not be engaged in trade or business in Greece through a permanent establishment there, and it does not apply to interest a Greek corporation pays to a US corporation controlling more than 50% of its voting power. It also turns on being a resident of the United States, so a US citizen residing in Greece does not get it. For US tax purposes, this income remains fully taxable.
Article VII (Royalties).
Royalties for the right to use copyrights, patents, designs, secret processes and formulae, trademarks, and analogous property are exempt from tax in the source country, as are rentals for the use of industrial, commercial, or scientific equipment other than motion picture films. The exemption is conditional on the recipient not being engaged in trade or business in the source country through a permanent establishment there.
| Income type | Treaty rate | Statutory rate | Notes |
|---|---|---|---|
| Dividends | Not Specified | 30% | The treaty does not provide for a reduced rate on dividends. |
| Interest | 0% | 30% | Article VI exempts Greek-source interest from Greek tax for a resident or corporation of the United States, only to the extent the interest does not exceed 9% per annum and only where the recipient has no permanent establishment in Greece. It does not apply to US citizens residing in Greece. |
| Royalties | 0% | 30% | Article VII exempts royalties for copyrights, patents, designs, secret processes, trademarks, and analogous property, plus equipment rentals other than motion picture films, provided the recipient has no permanent establishment in the source country. |
Because of the saving clause, a US citizen generally cannot use the treaty to exempt income from US tax; it mainly supports reduced withholding for payments from Greece to the US.
Greek Retirement Plans and US Tax Implications
Greek retirement and pension plans are generally not considered 'qualified retirement plans' by the IRS. This means they do not receive the same tax-deferred treatment as a US 401(k) or IRA.
Consequently, US persons may face several complex reporting requirements:
- Foreign Trust Reporting: Many Greek pension schemes may be classified as foreign trusts. This can trigger a requirement to file Form 3520 (Annual Return To Report Transactions With Foreign Trusts) and Form 3520-A (Annual Information Return of Foreign Trust With a U.S. Owner).
- PFIC Reporting: If the retirement plan invests in Greek or other non-US mutual funds, these are likely treated as Passive Foreign Investment Companies (PFICs). This requires filing Form 8621 for each fund, which can lead to a significantly higher tax liability under default US tax rules.
- FBAR and FATCA: The balance in a Greek retirement account must be included when determining if you meet the filing thresholds for the Report of Foreign Bank and Financial Accounts (FBAR) and Form 8938 (Statement of Specified Foreign Financial Assets).
Investments, property, and capital gains in Greece
US investors in Greece must navigate significant differences between the two countries' tax systems. Investments in Greek mutual funds or other pooled investment vehicles typically fall under the US rules for Passive Foreign Investment Companies (PFICs). This necessitates filing Form 8621 and can result in punitive tax rates unless specific, timely elections are made.
When selling assets, US citizens report worldwide capital gains. While you can generally claim a US foreign tax credit for capital gains taxes paid to Greece, the rules for calculating the gain and the applicable rates may differ. Ownership in a Greek company, such as an Anonymi Etaireia (A.E.), Etaireia Periorismenis Efthynis (E.P.E.), or Idiotiki Kefalaiouchiki Etaireia (I.K.E.), can also create complex reporting. The entity is a Controlled Foreign Corporation (CFC) where US shareholders who each own 10% or more hold, in the aggregate, more than 50% of it by vote or by value, which can require the filing of Form 5471 and potentially leading to current US taxation on the company's earnings under the GILTI (Global Intangible Low-Taxed Income) or Subpart F regimes.
Self-employment and companies in Greece
For self-employed US citizens in Greece, the US-Greece Totalization Agreement (also known as a Social Security Agreement) is a critical document. This agreement determines which country's social security system a person pays into, preventing double taxation for social security purposes.
Under the agreement, a self-employed individual who is subject to the Greek social security system can obtain a Certificate of Coverage from the relevant Greek authority. Presenting this certificate with a US tax return provides an exemption from US self-employment taxes (Social Security and Medicare) on those same earnings. Income tax is still due to the US on that income, though it can often be offset by foreign tax credits for Greek income taxes paid.
Worked examples
Marketing manager in Athens on a local Greek payroll (2025)
A US citizen earns a salary of €92,000 (approximately $100,000) from a Greek employer. They pay approximately €30,000 in Greek income and social security taxes. On their US return, the $100,000 salary would generate a tentative US tax of about $13,500 (depending on filing status and deductions). However, they can claim a Foreign Tax Credit for the Greek income taxes paid. Because the US and Greece have a Totalization Agreement, the Greek social security taxes are not creditable. As long as the Greek income tax portion alone is higher than the US tax liability, the credit completely eliminates their US income tax on the salary. They must still file the US return to report the income and claim the credit, and they must also report their Greek bank accounts on the FBAR if the total value exceeds $10,000.
Self-employed IT consultant in Crete (2025)
A US citizen works as a freelance consultant and has net self-employment earnings of $80,000. They are registered with the Greek social security system (EFKA) and make regular contributions. They obtain a Certificate of Coverage from EFKA. When filing their US tax return, they attach the certificate to claim an exemption from the US self-employment tax of 15.3% (approx. $11,304). They still owe US income tax on the $80,000, but they can use Foreign Tax Credits for the Greek income taxes paid on that same income to reduce or eliminate the US income tax liability.
Retiree in the Peloponnese with pension and investment income (2025)
A US citizen receives payments from a Greek private pension plan, which is treated as a foreign trust for US tax purposes, requiring them to file Forms 3520/3520-A. The distributions are fully taxable in the US. They also have an investment in a Greek mutual fund, which is a PFIC, requiring them to file Form 8621. They receive €5,000 in interest from a Greek bank. Because they reside in Greece, this interest is fully taxable by Greece (the treaty exemption only applies to US residents). The $5,400 equivalent is also fully taxable on their US return, though they can claim a Foreign Tax Credit for the Greek taxes paid. All of their Greek financial accounts, including the pension and investment accounts, must be reported on the FBAR and potentially Form 8938.
Common mistakes for Americans in Greece
- Assuming the US-Greece tax treaty eliminates the need to file a US tax return.
- Forgetting to report Greek pension and investment accounts on the FBAR and Form 8938.
- Treating a Greek mutual fund like a US one and failing to file Form 8621 for a PFIC.
- Believing a Greek pension plan is 'qualified' and thus tax-deferred for US purposes, when it is usually fully taxable and may require foreign trust reporting (Forms 3520/3520-A).
- Paying US self-employment tax while also paying into the Greek social security system, without obtaining a Certificate of Coverage to claim the exemption.
- Failing to file Form 5471 for a controlled Greek company (e.g., an I.K.E. or E.P.E.).
- Thinking that the treaty exempts Greek-source interest from Greek tax for US expats living in Greece (the exemption only applies to residents of the United States).
- Incorrectly applying the treaty's dividend article, which offers no reduction in the statutory withholding rate.
Greece tax FAQ
As a US citizen living in Greece, do I still need to file a US tax return?
Yes. The United States taxes its citizens and Green Card holders on their worldwide income, regardless of where they live. You must file a US tax return annually if your income meets the filing threshold. The US-Greece tax treaty does not eliminate this fundamental filing obligation due to the 'saving clause' which allows the US to tax its citizens as if the treaty did not exist.
How does the US-Greece tax treaty actually help me?
While the saving clause limits many benefits for US citizens, the treaty is still useful. Its main functions are: 1) It reduces or eliminates tax withholding on certain cross-border payments, such as the exemption from Greek tax on interest and royalties paid to a US resident. 2) It facilitates the exchange of information between the IRS and the Greek tax authority (AADE). For avoiding double taxation on your income, the Foreign Tax Credit is typically more important than the treaty.
Is my Greek pension taxable in the United States?
Generally, yes. Greek public and private pension plans are not considered 'qualified' retirement plans by the IRS. Therefore, contributions, employer matches, and growth may be taxable in the year they occur. Distributions are almost always taxable income on your US return. Furthermore, the plan may be treated as a foreign trust or a PFIC, triggering additional complex reporting on forms like 3520/3520-A and 8621.
I invested in a Greek mutual fund. What is a PFIC?
PFIC stands for Passive Foreign Investment Company. Most non-US mutual funds, including those in Greece, are considered PFICs by the IRS. If you own shares in a PFIC, you must file Form 8621 for each fund. The default tax rules for PFICs are extremely punitive. It is a common and costly mistake for US expats to overlook this requirement.
I am self-employed in Greece. Do I have to pay both Greek and US Social Security taxes?
No, you should not have to. The US-Greece Social Security (Totalization) Agreement prevents double taxation. If you are covered by the Greek social security system (EFKA), you can get a Certificate of Coverage from the Greek authorities. This certificate exempts you from paying US self-employment tax (Social Security and Medicare) on the same income. You must attach a copy of the certificate to your US tax return.
Do my Greek bank accounts need to be reported to the US?
Yes, very likely. If the aggregate value of all your foreign financial accounts (including Greek bank, brokerage, and pension accounts) exceeds $10,000 at any time during the year, you must file a Report of Foreign Bank and Financial Accounts (FBAR). Additionally, if your foreign assets are worth more than a higher threshold (which varies by filing status), you may also need to file Form 8938 with your tax return.
I own a small business in Greece, an I.K.E. What do I need to know for my US taxes?
If you own 10% or more of a Greek company like an I.K.E., E.P.E., or A.E., you may have significant US reporting obligations. The company is a Controlled Foreign Corporation (CFC) where US shareholders who each own 10% or more together hold more than 50% of it by vote or by value. This requires the filing of Form 5471, an extensive information return. You may also have to include some of the company's profits in your personal income currently under the GILTI or Subpart F rules, even if you do not receive a dividend.
The treaty says interest I earn in Greece is exempt from Greek tax. Does that mean I don't pay any tax on it?
If you live in Greece, your Greek interest is fully taxable by Greece. The treaty exemption on Greek-source interest only applies to residents of the United States, not to US citizens residing in Greece. Furthermore, as a US citizen, you are taxed by the US on your worldwide income. Therefore, you must report the interest on your US tax return and pay US income tax on it, though you can generally claim a Foreign Tax Credit for the Greek taxes paid.
Sources and last reviewed
- IRS, US-Greece Income Tax Treaty Text (verified 2026-06-07)
- SSA, US-Greece Totalization Agreement (verified 2026-06-07)
- US Embassy in Greece, IRS Information (verified 2026-06-07)
Reviewed by Ilya Fayerman, Esq. (NY Bar) on
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