General

Pursuant to Article 23 (1) of the VCDR and Article 32 (1) and Article 60 of the VCCR, the sending State and the head of mission are exempt from all national, regional or municipal dues and taxes in respect of the premises of the mission, whether owned or leased, other than such as represent payment for specific services rendered (e.g. street lighting and cleaning, connection charges for municipal services, garbage collection, drainage, land registration and court fees, notarial fees, etc.).

Real property tax (Grundsteuer)

Chanceries and residences that have been approved by the Federal Foreign Office for diplomatic or career consular use (i.e. that have obtained “approval of use”) are exempt from real property tax.

Real property tax is a tax that is levied only on owners of property. The sending State can accordingly only be exempted from tax on land and buildings that it owns, not on property that it leases. It is, however, legal for a landlord who is liable to tax to include terms in the lease agreement under which these taxes are passed on to his lessee (see also Article 23 (2) of the VCDR, Article 32 (2) of the VCCR).

Real property belonging to the sending State that is used for residential purposes by members of staff of a diplomatic mission or career consular post is exempted from real property tax on the basis of reciprocity. For details please consult the Regulation on the Granting of Tax Exemptions for Property of Foreign States used as Accommodation by the Staff of Diplomatic Missions and Consular Posts (Verordnung über die Gewährung von Steuerbefreiungen für Grundbesitz ausländischer Staaten, der für Wohnzwecke des Personals diplomatischer Missionen und konsularischer Vertretungen benutzt wird) of 11 November 1981 (Federal Law Gazette II 1981 p. 1002). Reciprocity is determined in accordance with the rules in the section on real property transfer tax, as applied mutatis mutandis.

Real property owned privately by home-based foreign members of diplomatic missions and career consular posts is fully taxable, as are buildings or portions thereof belonging to foreign States that are not used for diplomatic or consular purposes.

Real property transfer tax (Grunderwerbsteuer) and comparable dues and taxes

At the moment of purchasing real property, the privileges regarding taxes and dues granted under Article 23 (1) of the VCDR or Article 32 (1) of the VCCR do not yet apply. However, exemption will be granted from the real property transfer tax due upon purchase on the basis of reciprocity (section 4 of the Real Property Transfer Tax Act, Grunderwerbsteuergesetz, GrEStG).

To determine whether reciprocity exists, the Federal Foreign Office requires an official confirmation from the Foreign Ministry of the sending State that, should the German side purchase real property in the sending State for diplomatic or consular purposes (chancery building, residence, official housing), it will also be exempt from real property transfer tax and other fees incurred in connection with the purchase and any other applicable taxes on the basis of reciprocity.

In some countries it is against the law for foreign States to purchase real property. In such cases, in order to determine whether reciprocity exists, the Federal Foreign Office requires an official confirmation from the Foreign Ministry of the sending State that, should the German side acquire a long-term lease on real property in the sending State for diplomatic or consular purposes (chancery building, residence, official housing), it will also be exempt from all fees and taxes incurred to conclude the lease and to register it, if required, and from any other applicable dues on the basis of reciprocity. Further information about the standard period of use granted should also be given.

The Federal Government presumes that reciprocity exists if the sending State does not levy a tax equivalent to the German real property transfer tax or grants comparable concessions to diplomatic missions and career consular posts when levying such taxes.

Court costs

Any exemptions from court costs in Germany are determined in accordance with the law of the relevant federal state (Land). In Berlin, exemptions from court costs are granted on the basis of reciprocity as part of courtoisie internationale pursuant to section 2 (2) number 1 of the Berlin Act on Exemption from Fees, Deferment and Remission of Costs in Judicial Matters (Judicial Fees Exemption Act) (Berliner Gesetz über Gebührenbefreiung, Stundung und Erlass von Kosten im Bereich der Gerichtsbarkeiten (Justizgebührenbefreiungsgesetz)). Here, too, the Federal Foreign Office requires an official confirmation of reciprocity from the Foreign Ministry of the relevant sending State.

Notarial costs

Relief cannot be granted from the notarial costs incurred in connection with the purchase and conveyance of property, even if reciprocity is promised.