VAT form do’s and don’ts

By Carla Stamper
USAG Bavaria Public Affairs Office

Similar to sales tax, products or services purchased in Germany include a Value-Added Tax, or VAT, of either 7 or 19 percent. But unlike in the U.S., the sticker price here normally includes the taxes.

To reduce that sticker price, U.S. personnel and family members residing in Germany under SOFA status can use a tax relief form, commonly referred to as a VAT form. Items reduced by 19 percent with a VAT form include vehicle purchases and repairs, clothing, furniture, electronics, rental cars, heating oil, non-staple groceries and restaurant bills.

Food staples are those perishable items such as flour, milk, sugar and eggs. Use a VAT form for basic staple groceries, magazines, books and hotel stays — all taxed at the 7 percent rate. Note that hotel extras such as breakfast are taxed at 19 percent

Keep in mind that vendors are not necessarily VAT form experts–know the rules and restrictions to avoid paying taxes later.

Here are VAT form do’s and don’ts.

• Register for a VAT account. Sponsors create a household account at the garrison VAT office.

• Combine purchases. Multiple purchases from the same vendor can be combined on one form. You can use one VAT form, for example, for multiple tools you buy from a department store. Additionally, one VAT form can be used for multiple receipts totaling less the €2,499 from the same vendor. The receipts from the same vendor, however, must be dated all within the same calendar month.

• After-purchase usage. VAT forms are required at the time of purchase or order of merchandise. Going back to the vendor with a form after the purchase is not authorized.

• Vendors’ prerogative. Vendors are not required to accept VAT forms. Ask prior to purchase to avoid confusion.

• Choose the correct form. VAT forms come in two versions:

(1) NF1 VAT form – purchases of up to €2,499.99 (households are authorized 10 of these).

(2) NF2 VAT form – purchases of €2,500 or higher (households are authorized one of these).

• Group purchases. Groups such as units or spouses clubs can make a joint purchase — as long as the purchased item is for joint use or for a joint event or trip. The designated group member who obtains the VAT form in his or her name must be the designated individual at the period of purchase. In short, the person whose name is on the VAT form must also be the person paying the vendor.

• Split purchases. Using two VAT NF1 forms to split one purchase for over €2,500 is not authorized. For example, you cannot have €3,000 worth of items in your cart and check out twice using two forms. Plus, if purchasing a whole item such as a kitchen, you cannot go back several times and use different NF1 forms to buy sections of the cabinets.

• Long-term contracts. Long-term contracts exceeding one month are not authorized. Examples include utility bills, cell phone contracts and vehicle leases.

• Month-to-month services. VAT forms are authorized for these services.

For more in-depth information on the VAT program, read the VAT and UTAP Frequently Asked Questions or contact the USAG Stuttgart VAT office in Bldg. 2915, Rm 324, Panzer Kaserne, DSN: 596-3368 or CIV: 07031-15-3368.