The skinny on VAT

The skinny on VAT

by: Jeana Coleman | .
Stripes Europe | .
published: November 03, 2016

The European Union has a consumption tax called Value Added Tax (VAT) similar to U.S. sales tax. The average VAT amount is 20 percent and is automatically included in the merchandise or service price, not added at the register. However, members of the U.S. military and DOD civilians in Europe are granted exemption or relief from paying the VAT on many personal purchases in most European countries.

Participation by vendors in the VAT relief program is voluntary and may establish their own minimum purchase amounts, so check with vendors before making purchases. Watch for “Tax Free” signs or decals in shop windows. Each participating country’s VAT relief program has its own rules, including minimum purchase amounts, how to process the forms and what merchandise or services are VAT exempt. The following tax relief rates may vary based on purchased items and may be subject to processing fees. Check with your local VAT office for more information.

Belgium
VAT Rate: 21 percent
Those who qualify must be stationed at Supreme Headquarters Allied Powers Europe (SHAPE). Tax relief is available for furniture, durable household appliances, bicycles, computers, curtains and rugs. Not available for services, food, lodging, cars, clothing, decorations or personal items such as jewelry.

Purchases must be made at least six months prior to the date that you will PCS from your duty station. Purchase item and pay VAT, then go to VAT office for VAT form, then return to vendor for refund. The VAT office does not charge for forms; minimum purchase is €125.01. VAT office is run by Belgian Ministry of Finance. 

Italy
VAT Rate: 20 percent
Those who qualify are personnel stationed in or TDY to Italy. Although VAT is a national tax program, qualifying exemptions are determined by provincial fiscal authorities. Therefore, tax relief varies per installation. In Aviano, partial VAT relief may be available for auto repair, but check with your Legal office for information.

Germany
VAT Rate: 19 percent
Those who qualify must be stationed in, on TDY or on leave to Germany from another E.U. country. Tax-relief is available for most products or services, hotels, vehicles, furniture, clothing, food, guns and electronics. VAT can be used for some long-term contracts such as utilities (registration at VAT Office required); TKS services including Internet, home phone, and TKS easyMobile cellular service; and larger home repairs (with the exception of renovations). Ten blank VAT forms may be purchased at one time. VAT form yellow copy is kept by the vendor, the white copy returned to the VAT office and pink copy kept for the customer’s records.

For purchases up to €2499.99, obtain blank VAT forms from VAT office, go shopping and only pay net price without tax. Cannot combine multiple VAT forms for purchases greater than €2500 or used after merchandise has been purchased. Some vendors allow a single VAT form to be used for several purchases during a specified time, such as a week, month, and so on. For this type of purchase, the customer must check with the vendor prior to the purchase, and then visit the VAT office for a VAT form that is to be dated either before or on the date of the beginning of the purchase period. For purchases of €2500 or more, obtain cost estimate and take to VAT office, make cashier’s check payable to CMWRF. VAT office will issue VAT form and endorse check. Take both to vendor to make purchase without tax. This form is only valid for the specific purchase it was issued for. VAT office charge is $5 per form < €2500, minimum purchase €19 (also depends on vendor). 

The Netherlands
VAT Rate: 19 percent
Make a purchase and pay VAT with registered vendors. The vendor will provide VAT form that you return to VAT office for a stamp. Then return to vendor with the stamped form for your tax refund. Vendor registration is required. A list of registered vendors is available at the Schinnen Tax Relief Office. Tax relief may not be used for kitchens, cars, boats, food, drink, tobacco products, items designed to be permanently affixed to dwellings, labor costs, car service or rentals. VAT office charge is €1 to €16 for forms; minimum purchase is €19. 

Spain
VAT Rate: 18 percent
Tax relief can be obtained at airport customs. You will need your passport, receipts and merchandise purchased (if possible) to receive a refund. Purchases cannot be combined into one refund. Minimum purchase is €90.15.

United Kingdom
VAT Rate: 20 percent
Those who qualify must be stationed or TDY in the U.K. Tax relief is available at participating vendors for most products and services (only one car for singles or two cars for married couples). Inquire if vendors will participate. Prior to purchases, an invoice with vendor name, address, phone and itemization of goods must be obtained and taken with payment, processing fee, I.D. ration card and payment for goods in either Pound Sterling or Pound Sterling cashier’s cheque to VAT office. VAT Office will issue VAT documents and issue check to be given to vendor. Return signed yellow VAT form to VAT office within ten days after purchase. VAT Office charge is $8 to $10 for forms. Minimum purchase is £100. 

Tags: VAT, Europe, England, Germany, Spain, The Netherlands, Italy, Belgium, tax relief, finances
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