VAT refunds to diplomatic missions and non-honorary consuls
General Points
Under certain conditions, permanent foreign missions and their diplomats, non-honorary consular posts and their foreign members who are not permanently domiciled in the Federal Republic of Germany which purchase goods or services in Germany from a German entrepreneur may receive a refund of the invoiced value added tax (VAT) from the Federal Central Tax Office (BZSt). Direct exemption from VAT is not possible.
Statutory Bases
Relief from the VAT charged on the goods or services takes place in accordance with the regulation on the refund of VAT to foreign permanent diplomatic missions, non-honorary consuls and their foreign members - VAT Refund Regulation (UStErstV) of 3 October 1988 (Federal Gazette 1988, part 1, page 1780) in the form of a refund procedure.
A refund of VAT under UStErstV must be granted in accordance with §1, paragraph 2 UStErstV, subject to reciprocity. The scope of reciprocity is established by the exchange of verbal notes between the respective embassy and the German Foreign Office.
Responsibility
The responsibility of the Federal Central Tax Office is based on §5, paragraph 1, no. 3 of the Tax Administration Act (FVG).
Eligible Applicants
Permanent foreign diplomatic missions and non-honorary consuls of the states with which corresponding reciprocity agreements exist.
Foreign members of missions and representations not permanently domiciled in the Federal Republic of Germany (also subject to reciprocity).
Family members of the members seconded have no personal entitlement to refund of VAT. However, invoices issued in their name are taken into account within the scope of the refund application of the entitled member.
Formalities
Under §4, sub-paragraph 1 UStErstV, forms are used for the application process. Application forms can be found in the navigation bar on the left-hand side under "Forms".
Deadlines
The application must be made by the end of the calendar year following the calendar year in which the sale to the applicant took place (§4, paragraph 2 UStErstV). The deadline constitutes a time limit which cannot be extended.
Refund Conditions
The goods and other services for which an application is made are intended and appropriate for official use by the foreign missions or personal use by the member.
The original invoices from the entrepreneur providing the service must be enclosed with the application for a refund of VAT. The invoices must fulfil the requirements of §14, paragraph 1 of the [German] VAT Act (UStG).
Under §1, sub-paragraph 1 of the UStErstV, the individual invoice must itemise a gross purchase price (including VAT) of more than €100. The applicant must provide evidence of payment of the respective invoice, including the applicable VAT.
Under §2, sub-paragraph 2 UStErstV, the total refund for members of a diplomatic mission and consular officials is limited to €1,200 per calendar year. This does not include the purchase of a vehicle.
The refund of VAT on the purchase of a vehicle takes place on condition that the vehicle is used in Germany by the applicant for at least two years.
Under § 3 paragraph 1 UStErstV, the refund of VAT on the purchase of food (including beverages of any nature) and tobacco products is precluded.
Procedure
The applicant must send the completed application for a VAT refund in duplicate, enclosing the original invoices, to the Foreign Office, Department 701. The Foreign Office will consider the applicant's application entitlement and forward the applications to the Federal Central Tax Office, which has substantive responsibility. The Federal Central Tax Office will examine the conditions for a refund, issue a refund advice and send it to the applicant with the original invoices.
Certification Procedure Under Article 15, No. 10 Of 6th EC Directive
The beneficiaries of the UStErstV may be exempt from payment of foreign VAT on payments from another EU Member State, under the conditions of the UStErstV. The formal application is considered by the Federal Central Tax Office and endorsed as exempt. The purchaser submits said certification to the foreign entrepreneur, who must keep it with his tax documents for inspection by the responsible tax authority.
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