There is no single best one, and the ranking published for other nationalities does not hold. The United States taxes its citizens on worldwide income wherever they live, so a European regime helps an American only to the extent it lowers tax the US will not simply collect instead.
| Regime | What it covers | Headline treatment | Years |
|---|---|---|---|
| Portugal — IFICI, article 58-A EBF | Portuguese employment and self-employment income in listed activities, plus most foreign income | 20% flat rate on the Portuguese income; foreign income exempt, but pensions are not | 10 |
| Spain — Beckham, article 93 LIRPF | Income from sources located in Spain, taxed under non-resident rules | 24% to €600,000 and 47% above; savings income on a 19% to 28% scale | 6 |
| Italy — neo residenti, article 24-bis TUIR | All foreign-source income | A fixed annual sum in place of tax on that income, not a rate | up to 15 |
| Greece — article 5A | All foreign-source income, behind a €500,000 investment in Greece | €100,000 a year, whatever the foreign income amounts to | up to 15 |
| Greece — article 5B | Foreign pension income | 7% flat rate on the total | up to 15 |
Why does the ranking change for a US citizen?
Because the American half of the bill does not move. Section 911 lets a qualified individual elect to exclude foreign earned income — $132,900 for tax years beginning in 2026, set at section 4.39 of Revenue Procedure 2025-32 — and that exclusion reaches earned income only, not pensions or annuities. Everything above it is taxed by the United States, reduced by the credit for foreign income taxes paid.
Section 904(a) then caps that credit. It cannot exceed the same proportion of the US tax as the taxpayer’s taxable income from sources without the United States bears to entire taxable income. The effect runs against intuition. A regime that drives the European tax towards nothing leaves nothing to credit, and the United States collects the difference — so the saving moves from a European treasury to the American one rather than into the taxpayer’s hands.
What does Portugal’s IFICI exempt, and what does it not?
A flat 20% applies to Portuguese employment and self-employment income, and most foreign income is exempt — but pensions are not. Portugal’s tax authority states that the 20% rate covers categories A and B where the conditions of article 58-A of the Estatuto dos Benefícios Fiscais are met, that foreign-source income is generally exempt from IRS, and that category H, pensions, remains taxable.
The regime runs for ten consecutive years from registration, and registration falls due by 15 January of the year following the year of becoming resident. Eligibility is narrow. Portaria n.º 352/2024/1, published in the Diário da República on 23 December 2024, sets out the qualifying activities — higher-education teaching and scientific research, qualified roles in certified startups, research and development work, and the highly qualified professions listed in its Annex I — each certified by a named body, from the Fundação para a Ciência e a Tecnologia to Startup Portugal. Income arising in tax-favourable jurisdictions carries a 35% withholding instead of the exemption.
How much does Spain’s Beckham regime charge?
24% on the general taxable base up to €600,000 and 47% on the remainder, with dividends, interest and capital gains taxed on a savings scale running from 19% to 28%. The Agencia Tributaria publishes those figures in its Renta manual, and the regime applies for the tax period in which the change of residence occurs and the five following tax periods.
The structure matters more than the rate. Under article 93 a person keeps personal income tax status but is taxed by reference to non-resident rules, on income obtained from sources located in Spain. The bar to entry is not having been resident in Spain during the five tax periods before the move. For an American whose income is largely US-source, Spain takes comparatively little under this regime — and a low Spanish figure is a small credit against the American return, not a small total.
How does Italy’s flat tax for new residents work?
As a fixed annual sum in place of tax on foreign income, not as a percentage. Article 24-bis of the TUIR allows a person who has not been resident in Italy for at least nine of the ten preceding tax periods to pay a set amount each year covering all foreign-source income, for a maximum of fifteen years, with a further set amount for each family member brought into the option.
The amount is the part to check, and not on a summary page. The Agenzia delle Entrate’s page on the regime and the Italian government’s Investor Visa portal both give €100,000 a year with €25,000 per family member, the amounts the regime carried when it was introduced by the 2017 budget law. That figure is set by the text of article 24-bis rather than by either page, and the article has been amended since, so the sum that governs is the one in the statute as it stands in the year residence is transferred. The payment falls due in a single instalment by 30 June each year, and the benefit lapses on non-payment, partial or total.
What do Greece’s articles 5A and 5B offer?
Article 5A charges €100,000 a year on all foreign income regardless of its size, for up to fifteen tax years. Article 5B charges 7% on foreign pension income, also for up to fifteen years. Greece’s Independent Authority for Public Revenue sets out both, together with the conditions that gate them.
Article 5A is bought rather than claimed: at least €500,000 invested in Greek assets or businesses, completed within three years, and no Greek tax residency in seven of the eight years before the transfer. Article 5B asks for five of the six preceding years and a move from a state that has a tax-cooperation arrangement with Greece. A third route, article 5C, exempts 50% of income from employment or business activity arising in Greece for seven years, on the same five-of-six condition.
Does a fixed annual sum count for the US foreign tax credit?
That is the open question the lump-sum regimes raise, and it is not a formality. The Treasury regulation at 26 CFR 1.901-2 treats a foreign levy as a foreign income tax only where it is a foreign tax and is either a net income tax or a tax in lieu of an income tax. A net income tax has to satisfy the net gain requirement — realization, gross receipts, and recovery of the significant costs and expenses attributable to them.
A fixed annual sum is not computed on the income it displaces, which is what puts it outside the net income tax branch and leaves the tax in lieu of an income tax branch to be settled. Portugal’s 20% and Spain’s 24% raise no such question, because each is a rate applied to a measured amount of income. That distinction decides whether a European payment reduces an American bill or sits on top of it, and it separates the two Mediterranean regimes from the two Iberian ones more sharply than any headline figure does.
Where each regime leaves a US citizen
The four divide by what they shelter rather than by how generous they read. Three of them shelter foreign-source income, which for an American in Europe is largely income the United States taxes as well. One of them cuts the rate on locally earned income, which is the case in which the section 911 exclusion and the foreign tax credit do the most work.
- Portugal — 20% on Portuguese earnings in a listed activity, foreign income exempt apart from pensions, ten years, registration by 15 January
- Spain — 24% to €600,000 on Spanish-source income and 47% above, savings income at 19% to 28%, six tax periods, five years of prior non-residence required
- Italy — a fixed annual sum on foreign income for up to fifteen years, nine of the ten prior years spent outside Italy, with the creditability question attached
- Greece — €100,000 a year under article 5A behind a €500,000 investment, or 7% on foreign pensions under article 5B, each for up to fifteen years
- All four — none of them alters the US filing obligation, the $132,900 exclusion for 2026, or the section 904(a) cap on the credit
Eligibility narrows the field further than the rates do. Portugal’s certified activity list and its January deadline, Spain’s five-year bar and six-period life, Italy’s nine-of-ten-years condition, Greece’s seven-of-eight and its half-million euros — each is a gate that closes before any rate is reached. The regime a particular American can actually enter is usually a shorter list than the regime that looks best on paper.
Sources
- Autoridade Tributária e Aduaneira (Portugal) — IRS · Incentivo Fiscal IFICI, perguntas frequentes — https://info.portaldasfinancas.gov.pt/pt/apoio_contribuinte/questoes_frequentes/pages/faqs-01018.aspx — checked 19 September 2026
- Diário da República (Portugal) — Portaria n.º 352/2024/1, de 23 de dezembro, que regulamenta o artigo 58.º-A do Estatuto dos Benefícios Fiscais — https://files.diariodarepublica.pt/1s/2024/12/24800/0004000045.pdf — checked 19 September 2026
- Agencia Tributaria (España) — Manual de Tributación de No Residentes, régimen especial de impatriados, artículo 93 Ley IRPF — https://sede.agenciatributaria.gob.es/Sede/ayuda/manuales-videos-folletos/manuales-practicos/manual-tributacion-no-residentes/regimenes-opcionales/regimen-especial-impatriados.html — checked 19 September 2026
- Agencia Tributaria (España) — Manual Renta 2024, régimen fiscal especial aplicable a los trabajadores desplazados a territorio español — https://sede.agenciatributaria.gob.es/Sede/ayuda/manuales-videos-folletos/manuales-practicos/irpf-2024/c15-calculo-impuesto-determinacion-cuotas-integras/regimen-fiscal-especial-aplicable-trabajadores.html — checked 19 September 2026
- Agenzia delle Entrate (Italia) — Opzione per i neo residenti, che cos’è — https://www.agenziaentrate.gov.it/portale/schede/agevolazioni/opzione-per-i-neo-residenti/infogen-opzionale-neo-residenti — checked 19 September 2026
- Governo Italiano — Investor Visa for Italy, regime fiscale agevolativo per nuovi residenti — https://investorvisa.mise.gov.it/index.php/it/home-it/regime-fiscale-agevolativo-per-nuovi-residenti — checked 19 September 2026
- Ανεξάρτητη Αρχή Δημοσίων Εσόδων (AADE, Greece) — Φορολογικά κίνητρα προσέλκυσης νέων φορολογικών κατοίκων, άρθρα 5Α, 5Β και 5Γ ΚΦΕ — https://www.aade.gr/sites/default/files/2023-09/forolologika_kinitra_pros_newn_forol_kat_kfe_new_EL.pdf — checked 19 September 2026
- United States Code — 26 U.S.C. § 904, Limitation on credit — https://uscode.house.gov/view.xhtml?req=%28title%3A26+section%3A904+edition%3Aprelim%29 — checked 19 September 2026
- United States Code — 26 U.S.C. § 911, Citizens or residents of the United States living abroad — https://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title26-section911&num=0&edition=prelim — checked 19 September 2026
- Code of Federal Regulations — 26 CFR 1.901-2, Income, war profits, or excess profits tax paid or accrued — https://www.govinfo.gov/link/cfr/26/1?link-type=pdf§ionnum=901-2&year=mostrecent — checked 19 September 2026
- Internal Revenue Service — Revenue Procedure 2025-32, section 4.39, foreign earned income exclusion for 2026 — https://www.irs.gov/pub/irs-drop/rp-25-32.pdf — checked 19 September 2026
Common questions
- Is there a single best European tax regime for Americans?
- No single one wins. The United States taxes its citizens on worldwide income wherever they live, so a European regime helps an American only to the extent it lowers tax the US will not simply collect instead. The ranking published for other nationalities does not hold once the American half of the bill is put back in.
- Does Portugal’s IFICI exempt my pension income?
- No. Portugal’s tax authority states that foreign-source income is generally exempt under IFICI but that category H, pensions, remains taxable. The exemption covers most other foreign income. Portuguese employment and self-employment income in a qualifying activity is taxed at a flat 20% instead, under article 58-A of the Estatuto dos Benefícios Fiscais.
- What rate does Spain’s Beckham regime apply, and up to what amount?
- 24% on the general taxable base up to €600,000, and 47% on the remainder. Dividends, interest and capital gains are taxed separately on a savings scale running from 19% to 28%. The Agencia Tributaria publishes those figures in its Renta manual. Tax falls on income obtained from sources located in Spain, under non-resident rules.
- How many years does each of these regimes run for?
- Portugal’s IFICI runs for ten consecutive years from registration. Spain’s Beckham regime covers the tax period in which residence changes and the five following tax periods, so six in all. Italy’s article 24-bis option runs for a maximum of fifteen years. Greece’s articles 5A and 5B each run for up to fifteen tax years.
- Do any of these regimes end my US filing obligation?
- None of them does. The United States taxes its citizens on worldwide income wherever they live, and no European regime alters that. The section 911 exclusion of $132,900 for 2026 and the credit for foreign income taxes paid remain the only reliefs on the American side, and the section 904(a) cap still limits the credit.
- Can I claim the foreign earned income exclusion while using one of these regimes?
- The exclusion is a separate federal provision and is not switched off by a European regime. It is worth $132,900 for tax years beginning in 2026, set at section 4.39 of Revenue Procedure 2025-32, and it reaches foreign earned income only — not pensions or annuities. Income exceeding that amount is taxed by the United States, reduced by the foreign tax credit.
- Does a fixed annual sum like Italy’s or Greece’s give me a US foreign tax credit?
- That question is open rather than settled. The Treasury regulation at 26 CFR 1.901-2 treats a foreign levy as a foreign income tax only where it is either a net income tax or a tax in lieu of an income tax. A fixed sum is not computed on the income it displaces, which puts it outside the net income tax branch.
- Why can a lower European tax bill leave me no better off?
- Because the US credit is a credit for tax actually paid. Section 904(a) caps it at the same proportion of the US tax as foreign-source taxable income bears to entire taxable income. A regime that drives the European tax towards nothing leaves nothing to credit, so the United States collects the difference and the total stays where it was.
- What does Greece’s article 5A require beyond moving there?
- At least €500,000 invested in Greek assets or businesses, completed within three years, and no Greek tax residency in seven of the eight years before the transfer. The charge is then €100,000 a year on all foreign income, regardless of its size, for up to fifteen tax years. Article 5B, the 7% pension route, asks for five of the six preceding years instead.
- How much is Italy’s flat tax for new residents?
- The Agenzia delle Entrate’s page and the Italian government’s Investor Visa portal both give €100,000 a year with €25,000 per family member — the amounts the regime carried when the 2017 budget law introduced it. The figure is set by the text of article 24-bis, which has been amended since, so the governing sum is the statutory one for the year residence is transferred.
- When do I have to register for Portugal’s IFICI?
- By 15 January of the year following the year of becoming resident in Portugal. Eligibility rests on a listed activity: Portaria n.º 352/2024/1, published in the Diário da República on 23 December 2024, names higher-education teaching and scientific research, certified startups, research and development work and the highly qualified professions in its Annex I, each certified by a named body.
A note on tax content
Tax content on this site is for general informational purposes only and does not constitute tax advice. Rules for U.S. citizens abroad depend on individual circumstances, country of residence, income sources, account structures, and applicable treaties — always consult a qualified tax professional in the relevant jurisdiction before making decisions.
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