A German state court said efforts by local finance offices to tax U.S. military pay violate the NATO troop treaty, marking a development in a dispute that has caused financial devastation for scores of Americans.
The case did not delve into the main dispute over whether SOFA offers blanket tax protection for U.S. personnel on orders in Germany.
The order to collect info on those affected comes nearly two years after the U.S. accused Germany of violating the NATO Status of Forces Agreement, an international treaty intended to put military pay and benefits off-limits to local tax collectors.
The case spotlights the financial danger faced by some U.S. military personnel in Germany at the hands of local tax offices, which have argued the SOFA treaty can be disregarded under certain circumstances.
A report given to German tax collectors that included commissary expenditures, on-base gasoline purchases and more ended up being used against a US military-affiliated family in tax court.
A US military family in Bavaria is being targeted by German tax investigators, possibly signaling an expansion of a controversial tax collection operation to a state where tens of thousands of Americans are based
Secretary of State Antony Blinken said he is unaware of a treaty dispute that has exposed scores of U.S. military personnel to hefty tax penalties at the hands of German finance authorities, but that he intends to look into the matter.
The financial toll for those snared in the German tax system has been devastating: bills reaching into six figure sums, threats of imprisonment, frozen bank accounts and court battles.
The Pentagon, along with State and Treasury departments, have put the US Embassy in Berlin in charge of leading efforts to resolve the issue.
A key German lawmaker says it is “legally problematic” for local authorities to levy tax bills on U.S. forces and that Berlin must end double income taxation, which has financially devastated some military families.
Service members targeted by German tax collectors say US military commands leave them to fend for themselves.
Involvement of senior U.S. officials comes after Germany has threatened to impose hefty tax penalties — some in six figures — on troops and civilians who it says have special ties to the country.
German towns that house U.S. troops have expanded efforts to impose income tax penalties on some military personnel, say affected families and an attorney warning that an assignment in Germany carries growing financial risk.
Regional lawmakers in Germany are investigating why a finance office near Ramstein Air Base has stepped up efforts to collect income tax from American troops and military civilians, possibly breaching an international treaty that governs U.S. forces in the country.
U.S. Army Europe says it will step up efforts to warn troops and civilians about potential financial risks as local authorities attempt to levy German income tax on some members of the military community.
The move levies double taxation on an airman who already pays U.S. income taxes and potentially threatens service members who marry Germans or take any number of steps to integrate into life outside the base gates.
