US Military in Germany exempt from paying taxes – or not?

In fact, members of the US Army stationed in Germany are exempt from paying taxes in Germany. Since 1951, the NATO troop statute has stipulated that pay and salary are only taxed in the home country, i.e. the US – US forces are therefore exempt from paying German income tax.

But again and again there are cases – especially at the Ramstein location – in which the tax office in Kusel-Landstuhl is demanding tax payments from

  • soldiers and their families and
  • civilian employees and their families.

Often penalties up to €10,000 can be imposed on those affected – or even prison sentences!
Are you affected by such unjustified tax claims? Our specialist tax lawyers will be pleased to support you in defending yourself against baseless claims from the German tax authorities.

Tax liabilities, calculated 10 years back

In recent years, legal disputes involving amounts of up to €300,000 have become increasingly common – sums that threaten one’s very existence. Two questions are particularly important in these proceedings:

  1. Do the persons have German citizenship?
  2. Are the persons staying in Germany for reasons other than their employment with the US Army?

In such cases, the double taxation agreement that Germany concluded with the US in 2006 comes into effect – i.e. payments are due to both the US and German tax authorities.

Double taxation – what other reasons are there for this?

A marriage between a member of the US forces and a citizen of Germany or a German taxable in Germany is considered an indication that a designated tax office may become active. And children resulting from such a marriage also play a role in the examination of the tax liability – just as a common residential property.

In the sights of the tax office: gasoline, cigarettes and sports

In a case currently pending before the Federal Fiscal Court, special attention is also being paid to the benefits granted to members of the US Army. A German tax office recognized monetary advantages in inexpensive gasoline, cheap cigarettes or the free use of sports facilities, gyms and golf courses, for which an annual flat rate of €18,000 was set – regardless of whether the person concerned uses these discounted options at all. Or whether a lack of willingness to return to the United States can be proven.

Defend yourself against unjustified tax claims!

Do you require support in defending an unjustified claim by a German tax office? Or have you already been asked to file an income tax return for subsequent taxation? We at the law firm BlumLang are experts in German tax law – and will be happy to assist you with advice and support.