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Understanding the VAT System in Germany

A Guide for PCS Families in the Kaiserslautern Military Community

Maximizing Savings with VAT Forms in Germany: A Guide for American Military and Civilian Personnel

Introduction

For American military and civilian personnel stationed in Germany, understanding and utilizing the Value-Added Tax (VAT) Relief Program is key to saving money on various purchases. This blog covers essential aspects of the program, including eligibility, usage, and common pitfalls to avoid.

Understanding VAT in Germany

Germany imposes a VAT of either 19% or a reduced rate of 7% on most goods and services. The full rate applies to a majority of items, while the reduced rate is for basic food items, some books, and hotel stays. Notably, the VAT is usually included in the sticker price.

Eligibility for the VAT Relief Program

Department of Defense personnel stationed in or on TDY to Europe can use the U.S. Forces Tax-Relief Program to avoid paying VAT on personal purchases. This is possible by extracting the 19% or 7% VAT included in the sticker price through a valid VAT form obtained from a U.S. Forces VAT Office.  When first PCSing to Germany, bring a copy of your PCS Orders along with identification in order to purchase VAT forms. 

VAT Office Locations and Contact Information

Air Force – Ramstein Air Base

  • Location: Bldg. 2118, Harmon Avenue
  • Walk-ins: Welcome, but appointments recommended.
  • Phone: 06371-47-5309
  • Email: 86svs.vatoffice@us.af.mil
  • Hours: Monday-Friday, 8:00-16:00

Army – Kleber Kaserne

  • Location: Bldg. 3245, Rm 109
  • Walk-ins: Welcome, but appointments recommended.
  • Phone: 0611 1435419120
  • Hours: Monday-Friday, 8:00-12:00 / 12:30-16:00

The Process of Using VAT Forms

  • Obtain VAT Forms: Visit a VAT Office to get the forms. There are two types – NF1 for purchases up to €2,499.99 and NF2 for purchases of €2,500 or higher.
  • Present VAT Form at Purchase: The VAT form must be presented when placing an order or making a purchase. Retrospective VAT extraction is not permitted.
  • Vendor Participation: Participation in the program by German vendors is voluntary. If a vendor declines to accept a VAT form, consider finding another vendor.

Restrictions and Compliance

Abuse or misuse of the VAT Relief Program can result in tax liabilities, program expulsion, and potential legal consequences. It’s crucial to adhere strictly to the rules of the program.

Common Mistakes to Avoid

  • Improper Vendor Guidance: Do not rely solely on vendor information; always follow the official rules of the U.S. Forces.

Registration and VAT Office Limits

  • Account Registration: Personnel must register at a VAT office to participate. Household members can be added to the sponsor’s account.
  • Form Limits: Up to 10 NF1 forms and one NF2 form at a time per household are allowed.

Conclusion

The VAT Relief Program offers significant financial benefits for U.S. Forces personnel in Germany. Understanding and correctly applying the rules of the program is crucial for effective utilization and avoiding penalties. Always consult your local VAT Office for guidance and clarification on specific transactions.