Community Bank customers in Italy have been unable to receive same-day checks for tax-free purchases since April, when Navy Federal Credit Union took over the Defense Department's overseas banking contract from Bank of America. (Kent Harris/Stars and Stripes)
VICENZA, Italy — Community Bank procedures are now making military families wait up to a week to make purchases off base without paying value-added taxes, an unpublicized change that is forcing their customers to choose between higher prices and going without goods and services.
U.S. service members, others living under the status of forces agreement and many tourists who aren’t EU residents are eligible for refunds on VAT, which generally adds 22% to prices in Italy.
Community Bank offered same-day tax refunds until April, when the on-base military bank’s operations were transferred from Bank of America to Navy Federal Credit Union.
In early June, Hilary Parry, whose husband is stationed at Caserma Ederle in Vicenza, was packing for a family vacation when she realized she needed swim gear for her kids.
She went to Decathlon, where she had her order rung up without taxes, then headed to Community Bank to get a check.
Previously, the bank would have given her the check and she would have taken it to the VAT office at Caserma Ederle to be approved, then she would return to the store to pick up her purchase.
The process typically takes a few hours and is more complicated than for U.S. service members in Germany, where a participating store signs a VAT form and then deducts the price at the register.
Nevertheless, shoppers in Italy say the hassle is worth the tax savings.
But last week, Parry arrived at Community Bank and was told by the teller that the check would take at least five business days.
“This is a huge change,” Parry said. “Why did the bank not notify us about a change like this? If they had, while it’s annoying, we would at least know and plan accordingly.”
She ended up paying the full amount of her purchase, including around $60 in taxes.
“Sixty dollars is nothing to sneeze at,” Parry said. “There are families where that is not possible [to pay for]. And when you multiply that by all of us here [in Vicenza] it’s a lot of money.”
The bank’s new Italian partner, Intesa Sanpaolo, doesn’t allow Community Bank to produce the rebate checks in house, so Community Bank has to order them from Intesa and wait for them to be sent back, said Mimma Barber, a financial assistant at the tax relief office at Caserma Ederle.
“We’re now sending the majority of our customers to BNL, the Italian bank on base,” Barber said.
BNL can still produce same-day checks, even for those who bank elsewhere.
Community Bank declined to comment directly and referred all questions to Defense Finance Accounting Services, which oversees the bank.
DFAS spokesman Steve Burghardt said that agency is working with Community Bank to try to improve the process.
“But ultimately we do not control that outcome,” he said.
The change affects all Community Bank locations across Italy.
At MediaWorld on Tuesday, a woman who works on base and did not want to be named because she feared command retaliation for expressing her opinion, said she was frustrated with the new process.
MediaWorld’s tax-free receipt is good for 48 hours, after which the company will no longer hold items or prices. The woman had just been to Community Bank and heard for the first time about the new five-business-day procedure. She was at MediaWorld to ask for an extension.
“I was really upset,” she said. “I asked Community Bank when this changed, and they said two months, but nobody told us.”
While some large purchases like furniture can likely wait five business days, smaller purchases and sale items are more time-sensitive.
U.S. Army Garrison Italy commander Col. Scott Horrigan is looking into the issue, his office said, and also is considering ways to make the tax relief office’s hours more convenient.
The office is closed on Fridays, which can exacerbate the problem with the check-issuing delay, families said.
Customers aren’t the only ones who are frustrated.
“We prefer the old way for sure,” said a Community Bank teller who insisted on anonymity because she was not authorized to speak. “Before, it was only us doing everything, and it was much easier.”
