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B-114435 1 (1973-07-25)

handle is hein.gao/gaobablbl0001 and id is 1 raw text is: 
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B-i14435


RESTRICTED -    Not to be released outside the Genei  ,h
Accounting Office excei~t on the basis 01 S~ecifc SWpO4!     ',     V
b  toe Office of Conp s~n~lea~fs, a record of w?;~I
    1-3; y i~e Di~trlbuiUon Section, Pubficolk6*i4  Branch, GAS  00'
       COMPTROLLER GENERAL OF THE UNITED STATES
                  WASHINGTON. D.C. 20548           o


               RELEASED



                                             JUL 2 5 1973


The Honorable Thomas E. Morgan
Chairman, Committee on Foreign Affairs
House of Representatives


Dear Mr. Chairman:

     In your April Ii, 1973, letter you enclosed some documents provided
to you by Mr. Herbert A. Fechter, who works for the Department of Defense
in Heidelberg, Germany. These documents outlined several areas concern-
ing possible exemption from foreign taxes where, he believed, substantial
savings coul'21'be effected. ...g   . a

     Tht 'hcI     sum' ry of our inquiry into these matters responds to
your request for a rep t on the results of our work. In 6-ssence, it
shows that, contrary to Mr. Fechter's views, the U.S..military organi-
zationjs _nGermany are not paying the added-value tax applicable Eo the
indirect procurement of gasoline products.     

     Agreements between the United States and the Federal Republic of
Germany do not provide for exempting other gasoline taxes and vehicle
fees included in those indirect procurements. Although American Embassy
officials presently are adverse to renegotiating tax agreements that
would permit exempting those taxes, U.S. military officials hope that,
subject to the favorable resolution of a higher priority tax matter (land
tax) now being negotiated with the German Government, relief from the
indirect gasoline taxes and vehicle fees may be realized.

     The taxes paid indirectly through housing allowances for military
and civilian personnel and the fees paid the Canadian exchange on pur-
chase of foreign-made automobiles can be saved if payments and purchases
are made through a designated military organization. U.S. military
authorities are considering establishing such an organization.

     We requested U.S. military officials in Heidelberg to info-rm
Mr. Fechter of these circumstances so that he will know the status of
his suggestions.


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