US Expat Taxes in Europe

Nine countries, nine tax systems, one IRS. This page shows how Americans are taxed in each of the main European destinations, which treaty and totalization agreement applies, and the one mistake that costs the most in each country. Updated September 2026 by an Enrolled Agent who files these returns every week.

The nine countries at a glance

Every country below has an income tax treaty and a totalization agreement with the United States, so double taxation is manageable everywhere. What differs is the top rate you will pay locally, which sets how much Foreign Tax Credit you generate, and the local product or regime that the IRS refuses to recognise.

Country	Top income tax rate	Tax year	Treaty	Totalization	The trap for Americans
United Kingdom	45% (48% in Scotland)	6 April to 5 April	2001	Yes (1985)	ISAs are PFICs; the 25% pension lump sum is US-taxable
Ireland	40% plus USC up to 8%	Calendar	1997	Yes (1993)	Irish and EU ETFs are PFICs on top of the 38% exit tax
Germany	45% plus Soli	Calendar	1989	Yes (1979)	Riester and Rurup are not recognised; social insurance is not creditable
France	45% plus surtax	Calendar	1994	Yes (1988)	Assurance-vie and PEA are PFIC wrappers
Spain	47% (varies by region)	Calendar	1990	Yes (1988)	Beckham law exempts foreign income in Spain, not in the US; Modelo 720
Netherlands	49.5%	Calendar	1992	Yes (1990)	The 30% ruling allowance is fully US-taxable; Box 3 deemed returns
Italy	43% plus regional add-ons	Calendar	1999	Yes (1978)	The 7% flat tax credits only 7%, the IRS collects the rest; IVIE, IVAFE and Quadro RW
Portugal	48% plus solidarity surcharge	Calendar	1994	Yes (1989)	NHR is closed; IFICI-exempt income is still taxed by the IRS
Switzerland	About 40% combined, by canton	Calendar	1996	Yes (1980)	Pillar 2 and 3a growth is taxed currently; Swiss funds are PFICs

Full country guides

United Kingdom

Comprehensive 2026 guide to US expat taxes in the UK. Covers the ISA PFIC trap, 45% top income tax rate, new FIG regime replacing non-dom status, PAYE, Self Assessment, UK pension US treatment, Statutory Residence Test, and US-UK treaty benefits under the 2001 convention. By an IRS Enrolled Agent.

Ireland

The definitive guide to US expat taxes in Ireland. PAYE, USC, PRSI, SARP relief, US-Ireland treaty benefits, Irish pension reporting, PFIC traps, and FBAR requirements. By an IRS Enrolled Agent.

Germany

US taxes from Germany: filing requirements, treaty questions, foreign tax credits, pensions and account reporting. Prepare for your tax consultation.

France

US expat tax filing in France: review treaty relief, foreign tax credits, pensions, investments and account reporting, with links to official guidance.

Spain

The definitive guide to US expat taxes in Spain. IRPF, the Beckham Law trap, Modelo 720, wealth tax and the Solidarity Tax, the US-Spain treaty, PFICs, FBAR and FATCA. By an IRS Enrolled Agent.

Netherlands

The definitive guide to US expat taxes in the Netherlands: the 30% ruling, the Box 1/2/3 system, the Box 3 wealth-tax controversy, Dutch pensions, PFIC traps, the US-Netherlands treaty, FBAR and FATCA. By an IRS Enrolled Agent.

Italy

The definitive guide to US expat taxes in Italy: IRPEF, the neo-residenti flat tax, impatriati, IVIE/IVAFE, Quadro RW, the US-Italy treaty, and PFICs.

Portugal

The definitive 2026 guide to US expat taxes in Portugal. NHR is closed: how IFICI (NHR 2.0) works for Americans, 2026 IRS brackets, retiree and pension taxation, crypto, property, the US-Portugal treaty, FBAR and FATCA. By an IRS Enrolled Agent.

Switzerland

The definitive guide to US expat taxes in Switzerland. Federal, cantonal and communal tax, Quellensteuer, the three-pillar pension, wealth tax, the US-Swiss treaty, FBAR and FATCA. By an IRS Enrolled Agent.

Also in Europe: Sweden

What is the same everywhere in Europe

The saving clause. Every US treaty with a European country lets the IRS tax US citizens as if the treaty did not exist, with a short list of exceptions, mostly around pensions and social security. So the treaty is not what stops double taxation; the Foreign Tax Credit on Form 1116 is. In a high-tax country the credit wipes out the US bill and leaves excess credit to carry forward. In a special low-tax regime it does not, and the IRS collects the difference.

The fund problem. European funds are Passive Foreign Investment Companies. That covers UCITS ETFs sold across the EU, UK OEICs and unit trusts, Irish-domiciled ETFs, French SICAVs, and the funds inside ISAs, PEAs, assurance-vie contracts, Swiss pillar 3a accounts and many workplace pensions. The fix is the same in every country: hold US-listed ETFs in a plain account, and use the treaty where it protects a pension wrapper.

The bank letter. European banks report US account holders to their tax authority under FATCA, and the data reaches the IRS. Most Americans who have not filed for years find out this way. The Streamlined Foreign Offshore Procedures fix it with three years of returns, six years of FBARs and no penalties, provided the failure was not wilful.

Social security. The nine totalization agreements mean you pay into one system, not two, and can combine contribution years to qualify for benefits. The contributions are never creditable on your US return, which surprises people who see 20% of their pay going to them.

Topic guides for Americans in Europe

Frequently asked questions

Do I still file a US tax return if I pay tax in a European country?

Yes. The US taxes its citizens and green card holders on worldwide income wherever they live. Every tax treaty with a European country contains a saving clause that preserves that right. The treaty, the Foreign Tax Credit and the Foreign Earned Income Exclusion reduce or eliminate double taxation, but none of them removes the filing obligation. For 2026 you file if gross income exceeds $16,100 (single) or $32,200 (married filing jointly), or $400 of self-employment income.

Which is better in Europe, the Foreign Earned Income Exclusion or the Foreign Tax Credit?

In high-tax countries such as the UK, Ireland, Germany, France, the Netherlands and Italy the Foreign Tax Credit usually wins: local tax exceeds US tax on the same income, the excess credit carries forward ten years, and you keep IRA eligibility and the refundable child tax credit. The exclusion (up to $132,900 for 2026) wins in low-tax situations: a special regime such as the Dutch 30% ruling, Spain's Beckham law, Portugal's IFICI or Italy's impatriati relief, a first year under split-year rules, or a low salary.

Why are European investment funds a problem for Americans?

Almost every fund domiciled in Europe (UCITS ETFs, OEICs, unit trusts, SICAVs, Irish-domiciled ETFs, Swiss and German funds) is a Passive Foreign Investment Company to the IRS. Each one needs Form 8621 and, under the default rules, gains are taxed at the top ordinary rate plus an interest charge. Tax-free wrappers such as the UK ISA, French assurance-vie or PEA, and Irish or Swiss pension funds do not change that. Most Americans in Europe are better off holding US-listed ETFs in a plain brokerage account, which usually means a broker that accepts US persons and a workaround for the EU's PRIIPs rule.

Do special expat regimes like the 30% ruling, Beckham law, IFICI or the Italian flat tax reduce my US tax?

No. They reduce the local tax, and because the US taxes worldwide income under the saving clause, less local tax means less foreign tax credit. Income the regime exempts locally is taxed in full by the IRS. For some people the regime still wins overall; for others, especially those with US-source investment income, it can raise total tax. Run both calculations before you elect.

Are my European social security contributions creditable against US tax?

No. National Insurance, PRSI, German Sozialversicherung, French cotisations, Spanish Seguridad Social, Dutch premiums, INPS, Seguranca Social and Swiss AHV and BVG contributions are social security taxes, not income taxes, so they never go on Form 1116. What the US-European totalization agreements do is stop you paying US Social Security and Medicare tax on the same earnings, and let you combine contribution years to qualify for benefits. All nine countries on this page have an agreement with the US.

What has to be reported besides income?

Foreign accounts over $10,000 in total on FinCEN Form 114 (FBAR), including pensions, ISAs, PEAs and brokerage accounts. Foreign financial assets over $200,000 at year end or $300,000 at any time (single, living abroad; double for joint filers) on Form 8938. Each foreign fund on Form 8621. Treaty positions such as pension contribution exclusions on Form 8833. A 10% or larger stake in a European limited company on Form 5471. European banks report US account holders under FATCA, so the IRS usually already knows the accounts exist.

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