No change in VAT, utility program amid German tax increase to 19%

Christine June
U.S. Army Garrison Kaiserslautern

***image1***Cost and procedures for the military’s Value Added Tax forms and the Utility Tax Avoidance Program will not change when Germany increases its value added tax, a sales tax, from 16 to 19 percent on Jan. 1, said the 435th Services Squadron’s and U.S. Army Garrison Kaiserslautern’s VAT Office managers.

The value of the form and program also stays the same.

“Your tax relief will remain the same and only the amount you save will increase,” said Melody Boelé, Ramstein VAT Office manager.

There’s been a misunderstanding among some customers that Germany’s tax increase will raise the cost of VAT forms, said James Ross, U.S. Army Garrison Kaiserslautern VAT Office chief, who is responsible for Army VAT Offices throughout Rheinland-Pfalz. He cited as an example one of his offices here that sold $617 of VAT forms in seven hours, which was more than a 70 percent increase from its normal output.

What impacts the cost is how much it costs to process the forms, said Mr. Ross.

“There has been a steady increase in (processing) cost over the years, but we haven’t had an increase in our VAT forms in more than five years,” he said. “And, if there is a fee structure change in the works, I’m not aware of it at this time.”

Prices will also remain the same at the Ramstein VAT Office, said Mrs. Boelé.

Another misconception is that forms bought prior to the 19 percent increase must either be used or turned in by Jan. 1.

“There’s no need to panic; your previously purchased forms are still good,” said Mrs. Boelé.

The VAT relief is a privilege under the Status of Forces Agreement. There are two types of VAT Forms for goods and services of €2,500 or less, and exceeding €2,500. UTAP saves eligible individuals the value added tax associated with delivery of utilities such as electricity and gas. Under the direction of the U.S. European Command, the Army’s Installation Management Command-Europe is responsible for VAT and UTAP operations in Germany and U.S. Air Forces in Europe manages these programs in England.

Germany’s value added tax increase on Jan. 1 is the largest in four decades, reported the International Herald Tribune. The portal for the German Federal Government stated that the Ermäßigte Steuersatz, or reduced tax on food, water, medical supplies and other services will remain at seven percent.
For details, call the Ramstein VAT Office at 480-5309 or the Kleber VAT Office at 483-8896. (Sascha Dixon from the U.S. Army Garrison Public Affairs Office assisted with this article.)