Value Added Tax Office and Utility Tax Avoidance Program

VAT Facts

Germany has a "sales tax" of currently 19 percent called Value Added Tax for most items and a reduced VAT of 7 percent. U.S. Forces personnel stationed in Europe qualify for relief from this tax in a variety of ways:

• Utilities Tax Avoidance Program
• VAT Relief in Germany
• VAT Relief for purchases of €2,500 or more

Who is authorized tax relief?

• Active Duty, Reserves (when active), and some National Guard(when active)(and their family members) stationed in or on TDY in Europe and North Africa (on leave from European duty locations)
• civilian employees (and their family members) of the U.S. Forces who are entitled to full logistical support
• civilian contractor employees with status under Article 72 or 73 of the NATO SOFA SA
• employees of organizations accredited under Article 71, NATO SOFA SA
• Active Duty and civilian personnel assigned to International Military Headquarters in Germany when their sending nations are NATO members and have acceded to the Paris Protocol

How it works

Step 1: Personally register with your local U.S. Forces Tax Relief Office. Obtain and read additional regulation and procedure information. Click here to view the Army in Europe Regulation, AE 215-6 Value Added Tax Relief.

Step 2: Purchase the type of tax form(s) you need from your Tax Relief Office. The following two types are available:

• Purchases up to €2,499.99 (Unpriced Purchase Orders, used for purchases of €2,499.99 or less)
• purchase "blank" tax forms (you may have a maximum of 10 forms at any given time)
• forms are valid for 2 years from the day of issue
• authorized family members may also use the forms
• using 2 or more forms for purchases totaling more than €2,500 is illegal
• Purchases of €2,500 or more (Priced Purchase Orders, for larger ticket items such as vehicles
• obtain a cost estimate from the vendor made out to CMWRF( do not place an order or sign a bill of sale)
• bring the cost estimate to the VAT Office for review
• payment must be made with a Cashier's Check made payable to CMWRF. The check must be presented to the VAT Office for endorsement
• go back to the vendor, hand over the VAT Form and the check
• place your order or sign the bill of sale and receive the product or service

Step 3: Only the white original copy of the VAT Form is to be returned to the VAT Office, the Pink Carbon copy remains with the customer for their records.

Note: You must buy tax relief forms from your local tax relief office before making the purchase!

Goods and Services where payment of the VAT can be avoided

• car purchases, repairs and maintenance
• clothing, furniture, appliances, tools
• gifts (for ID card holders and folks back home)
• car rentals
• eating out (family or large group events -- check with VAT Office for procedures)
• repair services
• legal services (not for purchase/sale of real-estate)
• group travel (tours, facility usage, etc. -- check with VAT Office for details)
• home repair (not renovations -- check with VAT Office for definitions)
• and more!

Goods and Services where tax relief may NOT be used

• business activities (home-based or German licensed)
• permitting unauthorized personnel to use your forms (non ID card holders and persons not printed on the form)
• purchasing utilities directly from utility companies
• telephone service (based on long-term contracts)
• renovations, new construction, additions to homes
• customized kitchens that fit a particular layout of a dwelling (over 15,000 Euro)
• seeking VAT reimbursement after a purchase has already been made
• other purchases prohibited by Army in Europe Regulation 215-6 (if in doubt, check with your local U.S. Forces Tax Relief Office first)

Important Tip

When shopping at stores on the German economy system, check with store officials (usually information counter) to find out if they accept tax relief documents and how they are processed prior to making a purchase. Some stores require you to pay the full purchase price (including tax) at the register, then the tax relief documents are processed at the information counter and a refund of the VAT that was paid at the register is provided.

It is not mandatory for a vendor to accept the VAT FORM. Some vendors do not participate in this program.

It may be helpful to take along a copy of Information on Tax-Relief for Merchants in Germany according to the NATO SOFA/SA (German or English) to show merchants that explains the VAT program.