Greece and a US Annuity: The 7% Option, the 1950 Treaty and Double-Tax Risk

Written by Hans Goldstein, EA, licensed insurance agent · CA 4273294
Admitted to practice before the IRS
Updated October 2026

Greece is the country where the treaty is oldest and the answer is least tidy. There is a good 7% option, but it is built for people with a real pension, and Greek guidance does not say how a purchased US annuity is classified. I will mark each of those gaps.

How Greece taxes the check

A Greek tax resident outside the 7% option is taxed on worldwide income under the general provisions (Taxheaven: Law 4172/2013 art. 5B(5), checked 18 Oct 2026). Wages and pensions use a scale of 9% up to €10,000, 20% to €20,000, 26% to €30,000, 34% to €40,000, 39% to €60,000 and 44% above (Taxheaven: Law 4172/2013 art. 15, current text, checked 18 Oct 2026). The question is whether a privately bought life annuity belongs there. The code’s definition of pension income lists payments from mandatory and supplementary insurers, voluntary occupational funds and group occupational products (Taxheaven: Law 4172/2013 art. 12(3), checked 18 Oct 2026). An individual SPIA is not on that list, and I found no Greek ruling that says how a purchased annuity from a foreign insurer is taxed, or whether only a gain share counts. So I do not state a Greek base; the example below uses the whole check as a ceiling.

DIA and MYGA. A DIA pays like an annuity once it starts, so whatever Greece decides for the annuity applies to the checks. For a MYGA or a lump sum I found no verified Greek rule on accrual versus withdrawal, so I will not state one.

The 7% option for foreign pensioners (Article 5B)

Article 5B of the Income Tax Code lets a person who receives a pension from abroad and moves tax residence to Greece pay 7% a year on all income earned abroad, for 15 tax years. You must not have been a Greek tax resident in five of the previous six years, and you must move from a country that has an administrative cooperation agreement with Greece (Taxheaven: Law 4172/2013 art. 5B, checked 18 Oct 2026). The current procedure is AADE decision A.1192/2026: apply by 31 October of the year you arrive or of the next tax year, and pay in one instalment by the last working day of December (Taxheaven: AADE decision A.1192/2026, checked 18 Oct 2026). If you ever do not pay the full tax in a year, you fall out of the regime and are taxed on worldwide income under the general rules.

Scope. The regime asks for a pension in the code’s sense. AADE’s list of accepted proof covers payments from mandatory and occupational schemes and group pension contracts, with no individual annuity on it (AADE decision A.1192/2026, proof of pension status, checked 18 Oct 2026). So a purchased annuity alone very likely does not make you a pensioner for 5B. US Social Security or an employer pension is the natural qualifier, and once you are in, the 7% covers all your foreign income, the annuity included. Get a Greek adviser’s written view first.

Foreign tax. The decision says foreign tax paid on the covered income is deducted from the 7%, up to the Greek tax on that income, where the treaty gives both countries a taxing right or there is no treaty with the source country, and any excess is not refunded (AADE decision A.1192/2026, tax computation, checked 18 Oct 2026). With the US treaty, Article XI(2) lets only Greece tax a US-source life annuity paid to a Greek resident, so whether US tax on a US citizen counts is a point for your adviser. That is why Case 1 below shows both outcomes.

The treaty, and who taxes first

The 1950 treaty is short. Article XI(2) says private pensions and life annuities derived from one country by a resident of the other “shall be exempt from taxation by the former” country, and Article XI(4) defines life annuities as a stated sum payable periodically during life, so a life-only SPIA fits. Greece, as the residence country, taxes. Article XIV(1), the saving clause, lets each country tax its own citizens as if the treaty had not come into effect, so the US still taxes you. Article XIV(3) has Greece credit US tax on income from US sources, up to the Greek tax on that income (IRS: US-Greece convention Arts. XI and XIV, checked 18 Oct 2026); Greek domestic law has a matching credit limited to the Greek tax on that income (Taxheaven: Law 4172/2013 art. 9, checked 18 Oct 2026).

No re-sourcing. Unlike the Spanish and Portuguese treaties, this one has no paragraph that treats a US citizen’s income as foreign-source. An annuity from a US insurer is US-source, so I read the US foreign tax credit as unable to absorb the Greek tax. The relief runs the other way: Greece credits the US tax against the Greek tax. If Greece honors that credit, the total is about the higher of the two; if it does not, the two taxes stack. Confirm how AADE applies it to your return.

Wealth tax, exit tax and inheritance

PwC lists no net wealth tax in Greece; ENFIA is a property tax on real estate located in Greece, and the same page mentions no exit tax (PwC Worldwide Tax Summaries: Greece, other taxes, checked 18 Oct 2026). US citizenship-based tax stays with you.

Heirs and the refund feature. Greek inheritance tax for the closest relatives is 0% on the first €150,000, then 1%, 5% and 10%, and foreign real estate is outside it (PwC Worldwide Tax Summaries: Greece, other taxes, checked 18 Oct 2026). The page does not say how a US insurer’s death payment to a US-resident heir is treated, and I found no ruling on whether a cash-refund feature is return of capital. Both are open; ask a Greek adviser.

Dollar risk

The annuity pays in US dollars, so your cost of living in euros moves with the exchange rate. Over the 20 years from 16 Oct 2006 to 9 Oct 2026, the Federal Reserve H.10 series shows euros per dollar between 0.62 (22 Apr 2008) and 1.04 (27 Sep 2022), and 0.89 on 9 Oct 2026 (FRED DEXUSEU, inverted to euros per dollar, checked 18 Oct 2026). On an illustrative $35,000 check that range is about €21,861 to €36,398 a year in euros, and €31,270 at the latest rate. This is not a forecast. A home or other assets in euros partly offset the swing, and a dollar annuity then acts as a floor.

Worked example: $500,000 life-only SPIA, US citizen resident in Greece

The US side is the same in every country. I use a non-qualified life-only single premium immediate annuity (SPIA) of $500,000, bought at 65, with an illustrative payout of 7.0%, which is $35,000 a year (illustrative, not a quote). Under IRC 72(b) the tax-free share of each check is the premium divided by the expected return. IRS Publication 939 Table V gives a multiple of 20.0 at age 65, so the expected return is $700,000 ($35,000 x 20.0) and the exclusion ratio is 71.4%. That makes $25,000 of each check tax-free and $10,000 taxable. The exclusion stops once the $500,000 premium is recovered, about year 20; after that the whole check is taxable (IRC 72(b)(2) caps the excluded total at the unrecovered investment) (26 U.S.C. 72(b), checked 18 Oct 2026) (IRS Pub. 939 Table V, checked 18 Oct 2026). At 70 the multiple is 16.0, the exclusion ratio 89.3% and the taxable part $3,750 a year.

Because the Greek base for a purchased annuity is not settled, I show two bounding cases and treat the whole $35,000 check as the Greek base, ignoring currency conversion and any Greek allowances. Case 1 assumes you qualify for the 7% option through a real foreign pension. Case 2 uses the ordinary scale on the whole check as a ceiling (the scale is an assumption about classification, not a ruling). The US side uses an assumed 22% federal rate on the gain share (IRS: for 2026 the 22% bracket starts at $50,400 for single filers, checked 18 Oct 2026). I use the same check at 70.

Read it as a range. If the credits work as the treaty and the decision read, the total is the higher of the two taxes. If they do not, the taxes stack, which is the double-tax risk this treaty carries.

How to use this

I am a US-licensed insurance agent and an Enrolled Agent, admitted to practice before the IRS. I can only help with a US annuity while you still live in the US, so buy before you move. I do not give Greek tax or legal advice: get a local adviser’s written view on the open points above before you sign anything. Everything here is education, not tax advice, and every payout is an illustration, not a quote.

Frequently asked questions

Related reading

• Moving abroad on a fixed income: the hub
• Where a US annuity is tax-smart abroad
• How Europe taxes a US annuity
• Greece financially independent person visa
• Wealth tax by country and US annuities
• Spain: US annuity tax for retirees
• Portugal: US annuity tax for retirees

Sources

• Taxheaven: Law 4172/2013 art. 5B (alternative taxation for foreign pensioners)
• Taxheaven: AADE decision A.1192/2026 (procedure and tax computation)
• Taxheaven: Law 4172/2013 art. 12 (employment and pension income)
• Taxheaven: Law 4172/2013 art. 15 (income tax scale)
• Taxheaven: Law 4172/2013 art. 9 (foreign tax credit)
• IRS: United States and Greece convention (Arts. XI, XIV)
• PwC Worldwide Tax Summaries: Greece, other taxes
• 26 U.S.C. 72 (annuity exclusion ratio, 72(b))
• IRS Publication 939 (Rev. December 2025), Table V
• IRS: 2026 tax inflation adjustments (22% bracket)
• Federal Reserve H.10 via FRED: dollars per euro (DEXUSEU), pulled 18 Oct 2026