That means a favorable foreign tax rate may not deliver the tax savings you expect, depending on the taxes you may still owe the IRS. Greece: A 7% Flat Tax for Foreign PensionersAmong European countries, Greece offers the longest-running tax incentive for retirees. The Retirement GroupIf you buy property abroad, the Foreign Tax Credit may offset foreign taxes owed on rental income. While this provision shelters up to $132,900 of income per qualifying person, it applies only to active work performed abroad, not to retirement income. If the lowest possible tax rate attracts you, Greece could be a good choice.