status of forces aggreement, fed taxes

I will be working for NATO as a civilian. Am I exempt from Federal taxes while working for NATO in Germany under the Staus of Forces Aggreement? I was told that I will still need to file my returns but to add a copy of the aggreement to show that I am exempt. Is there any truth to this?

jeffavatech said:

I will be working for NATO as a civilian. Am I exempt from Federal taxes while working for NATO in Germany under the Staus of Forces Aggreement? I was told that I will still need to file my returns but to add a copy of the aggreement to show that I am exempt. Is there any truth to this?

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Status-of-forces agreements are not basing or access agreements. Rather, they define the legal status of U.S. personnel and property in the territory of another nation. The purpose of such an agreement is to set forth rights and responsibilities between the United States and the host government on such matters as criminal and civil jurisdiction, the wearing of the uniform, the carrying of arms, tax and customs relief, entry and exit of personnel and property, and resolving damage claims.

Status-of-forces agreements generally come in three forms. These include administrative and technical staff status under the Vienna Convention on Diplomatic Privileges, commonly referred to as A and T status; a “mini” status-of-forces agreement, often used for a short-term presence, such as an exercise; and a full-blown, permanent status-of-forces agreement. The appropriate arrangement is dependent upon the nature and duration of U.S. military activity within the host country, the maturity of our relationship with that country, and the prevailing political situation in the host nation.

So, the first question to you would be under which of the three circumstances do you fall?

Your wages are only exempt from income tax if you are an active duty member of the US Armed Forces, serving in a Designated Combat Zone.

Civilians assisting any type of military forces are specifically mentioned and excluded from the above provision.

Snipes

reply

I believe I will be under the permanet status as I will be a member of NATO as a civilian member. The employee manual stated that I will be reimbursed for any taxes paid to my country.

info

here is a copy of article 10 of the SOFA that deals with taxes.

Article X
Where the legal incidence of any form of taxation in the receiving State depends upon residence or domicile, periods during which a member of a force or civilian component is in the territory of that State by reason solely of his being a member of such force or civilian component shall not be considered as periods of residence therein, or as creating a change of residence or domicile, for the purposes of such taxation. Members of a force or civilian component shall be exempt from taxation in the receiving State on the salary and emoluments paid to them as such members by the sending State or on any tangible movable property the presence of which in the receiving State is due solely to their temporary presence there.

Nothing in this Article shall prevent taxation of a member of a force or civilian component with respect to any profitable enterprise, other than his employment as such member, in which he may engage in the receiving State, and, except as regards his salary and emoluments and the tangible movable property referred to in paragraph I, nothing in this Article shall prevent taxation to which, even if regarded as having his residence or domicile outside the territory of the receiving State, such a member is liable under the law of that State.

Nothing in this Article shall apply to 'duty' as defined in paragraph 12 of Article XI.

For the purposes of this Article the term 'member of a force' shall not include any person who is a national of the receiving State.