Supplying goods and services to US military forces stationed in Germany involves specific VAT regulations that foreign companies must adhere to. This guide provides detailed information to help businesses navigate these requirements effectively.
US Military Bases in Germany
The United States maintains several military bases in Germany, including:
- USAG Wiesbaden: Located near the historical city of Mainz, this base serves a diverse community of soldiers, family members, retirees, and civilian employees.
- USAG Kaiserslautern: Situated in the Rhineland-Palatinate region, it is one of the largest US military communities outside the United States.
- USAG Stuttgart: Known for its proximity to major German cities like Stuttgart, it supports various US military operations.
- USAG Bavaria (Grafenwoehr and Hohenfels): These bases are critical for training and operational support.
- Ramstein Air Base: A key installation for the US Air Force in Germany.
Import and VAT Procedures
Goods Imported via Rotterdam or Hamburg:
- Import VAT:
- When goods are shipped to Germany via major ports like Rotterdam (Netherlands) or Hamburg (Germany), import VAT is due in the respective country.
- In the Netherlands, import VAT can often be deferred or reclaimed under specific conditions.
- Documentation for VAT Exemption:
- To claim VAT exemption on supplies to the US military, the transaction must be documented as a tax-free export sale. Proper documentation includes a completed procurement form and proof of shipment to the US military.
- VAT Registration:
- Foreign companies must register for VAT in Germany to handle these transactions. This registration is essential for claiming VAT refunds and ensuring compliance with local tax laws.
Special Considerations
- Full Input Tax Deduction:
- Despite the VAT exemption on the sales (output transactions), businesses can fully deduct the input tax on their purchases related to these sales, ensuring complete VAT relief.
- Eligibility and Compliance:
- The exemption applies only to transactions directly executed by or for US military units stationed in Germany. Supplies for personal use by US troops and their dependents are also eligible.
- It’s important to ensure that the procurement order is placed by an official procurement office of the US military or a German authority acting on their behalf.
- Common Pitfalls:
- Many businesses mistakenly believe all transactions with US military forces are automatically VAT-exempt. However, the exemption is contingent upon meeting strict documentation and procedural requirements.
Assistance from WW+KN
At WW+KN, a Baker Tilly Company, we specialize in advising foreign companies, including those from the USA, Canada, and Australia, on VAT matters related to supplying US military forces in Germany. Our services include:
- VAT registration and compliance management
- Assistance with proper documentation and proof of VAT exemption
- Liaison with German tax authorities to resolve any issues
For detailed guidance and support, please contact us at info@vat-germany.com.
