European Stars and Stripes (Newspaper) - June 17, 1977, Darmstadt, Hesse                                Continued rom Page Alt Money will get his Cash Back at about 20 per cent interest per year the High rat justified by the risk of the business. Collect lability is often a problem notably wit Hyoung service personnel. Salespeople usually will pick up from $60to $100 per package and once More above the salespeople Are several layers of Man agers and executives All taking their cuts. Despite the  risk minimized currently by arranging for service personnel to make payment through the military allotment system into tent Banks in the United states the business can be highly Profita ble at the managerial level. Reports were heard several times that salespeople were also exploited. A Man Ager would Tell his salesperson that a Cus Tomer cancelled an order thus explaining Why no commission was paid. The top people would simply pick up the commission perhaps doling out a percent age to keep the salesperson alive and hungry and willing to continue punching do Sells or hustling gis in Barracks Gas Hauses or on duty  chief Point emerging from the pie slicing exercise is inescapable behind Al the sales arguments of educating yourself and your youngsters and storing a wealth of knowledge and culture on your Book shelves is the message that you pay and pay dearly to keep the wolves from those merchants doors. Mattens by Bob hover stall writer t just May be that those tax collectors Are Barking up the wrong tree. But Don t bet on  sneaking suspicion that Europe is a giant tax Dodge for hundreds of salespersons hitting up the lucrative . Military Market is not without foundation. Given the circumstances a Large Cap Tive audience composed of easily identifiable american communities and the human penchant for beating authority it s a foregone conclusion that a number of sales types Are ducking taxes owed to both Uncle Sam and Host nations. For those Bent on slipping All taxes the atmosphere could t be better. Unlike their military customers whose tax is withheld from paychecks these salespersons derive their income from commissions and the size of that income normally is a Well kept secret Between Sellers and the firms employing them. Complicating matters for tax authorities Are a variety of Host nation Laws a Large and changing sales Force composed of Many nationalities a wide spectrum of sales activities embracing such diverse products As encyclopedias chinaware an automobiles and the hit and run tactics of those who keep no permanent addresses inthe countries where they do their heaviest Selling. Yet with All the hocus pocus used by sales representatives to shield nonpayment of taxes the Laws Are specific enough. Clearly they exempt no one from paying taxes. For american who make of about Quarter of the Over 280 salespersons pushing encyclopedias in Europe the Laws of Host nations and the . Nor Mally apply. In Germany site of the largest group of americans in the overseas Market and scene of the most concentrated Selling efforts the american sales representative i liable for taxes in both countries. As defined by German finance ministry spokesman clans Figge German Law states that individuals living in Germany and earning their income in Germany must pay German income taxes. The tax status of the private Enterprise american making a living in Germany discovered in a tax treaty Between the Feder Al Republic and the United states. Article three of this convention mandates the pay ment of tax on Industrial and commercial  to a View held by Many Ameri cans . Citizens Are subject to income tax on All income earned in Germany or anywhere else in the world. And All Ameri cans arc required by Law to file income tax returns even though exemptions and for eign tax credits May reduce or eliminate taxes due in a Given tax  exemptions of up to $20,000 of earned income Are granted for american who meet the Bona fide residence test continuous residence in a foreign country for. It is fairly easy to avoid  an entire tax year or who spend 510 Days of an 18-month period abroad. These exemptions which do not apply to american son a government payroll Are spelled out in publication 54. An internal Revenue serv ice tax guide for . Citizens abroad. The $20,000 exemption extended by Legisla tons for 1976 income. Is to be reduced to $15.000 next  american claiming foreign tax credit will find its use outlined in irs publication s14 foreign tax credit is computed on form 1116 and filed with the taxpayer form 1040. German tax Law treats american Sand All other foreigner the same with earnings. Gunther Rudolph Hessen ministry of finance Wiesbaden singles out the hit and run salesmen As particularly trouble some for German tax  the German Law permits for Eigners to roam the country As tourists Forup to 90 Days it is very difficult to keep a record of the income earned by people who May move from one Community to another Rudolph  these individuals spend 90 Days in the country they May leave get their passports stamped and return for More business. There is just no Way to keep track of  Rudolph s View most of these hit and run sales types Are not paying taxes in Germany. Another problem arises with Bito doing bal Neil in Germany but Regis lend outside the country to Ivo taxes. Liechtenstein is a favorite tax shelter country for computes trying to Dodge German taxes. It is a fiction that Many of these firm scam their Money in Liechtenstein or cer Tain Swiss cantons which have Low tax rates. " Rudolph said. But Many of them get away with it. We do have a Case against them if we can show that they merely have an address in another country but do their business Here. The difficulty is to catch them Flugge says that a salesperson with nonpermanent address May not be liable for income tax but he should be paying added value tax on products sold in Germany. Rudolph Points out that although German police registers Are available to tax authorities they would not normally reused to Check tax payment. Police records do not list an individual s occupation or his earnings Rudolph said. Many foreigners do Register at local tax offices but it is those who Don t who Are probably not paying taxes. If a foreigner works for a German firm there is no question about taxes. But if he works for an american firm and is not registered wit the tax office it is fairly easy to avoid  Rudolph says that companies Selling their products to americans could help if they would provide tax officials with a list of employer earnings. He plans to bring up this idea with German Federal and state tax authorities he said. American Revenue officials Are under More restraint in seeking out tax cheaters. Wally Spencer. Irs attache at the . Embassy in Bonn Points out that tax offi Cial must have some evidence of noncompliance before beginning an investigation. We Are interested in any american incur area of responsibility Germany aus Tria Holland and Belgium who is not paying taxes owed the government Spencer said. In our work on tax matters we follow the treaties Between the United states and the other  because most tax cases Are civil rather than criminal in nature there is no extradition for violation of tax Laws. While tax col lectors work without this and other tools available in criminal cases Many tax dodgers go merrily on their Way doing business As usual. Page a2 the stars and stripes Friday june 17, 1977