Estonia may levy 5pct VAT on postal services
Estonia agrees with the European Council’s position concerning the harmonization of the tariffs of postal services, which may result in the addition of five percent VAT to the price of postal services in Estonia.
According to a policy paper drafted at the Ministry of Finance, Estonia is in favor of taxation of postal services with VAT on a uniform basis and application of as few exceptions as possible. Lifting the tax exemption for the universal postal service would be conducive to achieving this, the Estonian ministry finds.
The Estonian position will be presented to the government by Finance Minister Taavi Veskimagi on Thursday.
The ministry admits that if the plan is carried out it may lead to an increase in the price of universal postal service by the VAT rate. Estonia is levying no VAT on postal services now.
The ratio of private and corporate customers using the universal postal service in Estonia is 20 percent to 80 percent, approximately the same as the EU average.
