Got VAT?

U.S. service members and their families stationed in Germany or on temporary duty orders in the country are granted tax-relief as they are covered by the Status of Forces Agreement.

The SOFA is a set of entitlements and responsibilities which govern how U.S. service members live and function as a military community in the host nation of Germany.

Value-Added Tax, or VAT, relief is authorized under the SOFA. It is similar to a sales tax in the U.S. There are different rates for different products which range from seven to 19 percent and is added into the price. In order to participate, a U.S. service member must establish an account at their local VAT office by filling out a registration form. After the process is complete, the individuals are granted tax-relief by purchasing VAT forms.

“German vendors normally collect the VAT and pass it on to the German fiscal authorities,” said Ardenne Hackett, 86th Force Support Squadron VAT office manager. “Then the German government uses that money just like the U.S. uses sales tax.”

The German government uses VAT tax to support education, healthcare, transportation, public assistance, pensions, recreation, and environmental projects. It is important to note the following:

• VAT is not related to customs
• Vendors are not required to accept VAT forms
• Individuals should ask the vendor if they accept the VAT form prior to making a purchase
• Purchases are tracked for tax evasion and violators will be sanctioned
• Ask the local VAT Office before using VAT forms for real-estate related expenses

“VAT forms are official U.S. Government order documents that [the VAT offices] are authorized to issue to eligible participants,” said Hackett. “In turn, these documents permit the eligible customer to purchase certain items without the sales tax.”

There are two types of VAT forms. Normal Form-1 (NF-1) VAT forms are for purchases under €2500 and expires two years from the date of issue. Normal Form-2 (NF-2), are for purchases over €2500 and expire 90 days after the date of issue. Eligible individuals may be issued 10 NF-1’s, at a time. They will not receive new forms unless they turn in the used or expired VAT forms.

VAT forms are considered controlled documents, and are not transferrable; there are no exceptions to policy.

“If someone loses (a VAT form), a purchase order must be recorded and is counted as a violation for that particular household,” said Rafael Wunsch, U.S. Army Installation Management Command international operations manager.

For more details call the VAT office at 06371-47-5309.