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Intergovernmental agreement between Germany and Lithuania on defence cooperation

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​​​​​​​​​​​​published on​ 24 September 2024 | reading time approx. 3 minutes 

 

The agreement regulates the legal basis for the permanent stationing of a German battalion and offers tax and social benefits for deployed German personnel and German state-owned companies in Lithuania. Exemptions from various taxes and duties as well as the recognition of professional qualifications and access to educa­tional institutions promote the integration and cooperation of German forces in Lithuania.

  

 

    

   

Background

In June 2023, German Defense Minister Boris Pistorius announced that a brigade would be permanently stationed in Lithuania. This is a reaction to the Russian war of aggression against Ukraine since February 2022, which violates international law, and is intended to strengthen NATO's eastern flank.
 
In this respect, the German Defense Minister Boris Pistorius and his Lithuanian counterpart Laurynas Kasčiūnas signed an agreement on 13 September 2024, which is intended to supplement the NATO troop statutes applicable to both countries. The agreement creates the legal basis for the presence of the Bundes­wehr, including civilian support personnel and dependents.
 

Contents of the Agreement

This agreement creates the legal framework for the presence of 4,800 soldiers and 200 civilian employees of the Bundeswehr in Lithuania. It regulates important aspects such as the right of residence, tax law, public safety and the recognition of professional qualifications of the partners of members of the Bundeswehr. Here are the most important agreements​:

Taxes and duties

  • The Bundeswehr is exempt from VAT on the purchase of materials and services.
  • Deployed German personnel are exempt from taxes, fees, licence fees and similar charges on movable assets in Lithuania. Vehicles and trailers are exempt from Lithuanian motor vehicle taxes.
  • With regard to value-added, use, consumption or similar taxes or successor taxes thereto, an exemption applies in the Republic of Lithuania for German state-owned companies, legal entities majority-owned by the Federal Republic of Germany.
  • German state-owned enterprises, legal entities majority-owned by the Federal Republic of Germany, are exempt from Lithuanian laws and regulations when it comes to the conditions of their activities in the contractual performance of works with the German forces.
  • Income or profits of German state-owned enterprises, legal entities majority-owned by the Federal Republic of Germany, from contracts with German forces are exempt from taxes.
  

Professional and social integration

  • Lithuania does not require any additional permits for practicing a profession and recognizes the professional qualifications of family members, which facilitates the integration of accompanying family members into working life.
  • German early childhood education and after-school care as well as schools can be set up in Lithuania, teach according to German curricula and award German qualifications that are recognized by Lithuania. Education and care are provided in accordance with German pedagogical requirements. Deployed German staff can also attend all educational institutions in Lithuania under the same conditions as Lithuanian nationals.
  • Simplification of opening a Lithuanian bank account or renting accommodation by issuing a certificate of legal status.
 

Procurement and contracting

  • German forces are only bound by German regulations and those of the European Union regarding the choice of contractors.
 

Conclusion

All in all, the agreement between Germany and Lithuania on defense cooperation includes several key points that facilitate the deployment of German personnel and companies in Lithuania and strengthen bilateral relations.
 
The deployed German personnel and German state-owned companies will be exempt from certain taxes and fees, which will reduce their financial burden. In addition, German state-owned companies will be exempt from certain Lithuanian regulations, which will enable more efficient project management.
 
The recognition of German professional qualifications makes it easier to practice a profession. In addition, the certificate of legal status simplifies daily life, such as opening a bank account. German early childhood edu­cation centers and schools will be set up for the German staff posted to Lithuania, while also all Lithuanian educational facilities will be available at the same time. Finally, contracts awarded by the German armed forces in Lithuania are subject exclusively to German and European procurement law, which ensures compliance with recognized standards.
 
The measures promote the integration of the deployed German personnel and enable the permanent stationing of a German battalion in Lithuania.

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Michael Manke

Associate Partner

​+370 5 2123 590

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