Calls for Deutsche Post to pay VAT

Rivals of German postal services provider Deutsche Post have called for the new German government to levy VAT on the monopolist. The federal association of international express and courier services (BIEK) said that Deutsche Post’s exemption costs the treasury between 150m euros and 330m euros each year. The association believes that this gives Deutsche Post an unfair advantage over its rivals and stated that the situation could be changed immediately using EU law.

Deutsche Post, however, is not troubled. The group said that if it paid VAT, it would have to increase postage prices and that therefore EU law could not be used immediately. The head of Deutsche Post, Klaus Zumwinkel, has already stated that the group will pay VAT once the letter market is fully liberalised. The group’s monopoly is due to end at the close of 2007. Industry experts said that making Deutsche Post pay VAT now would disadvantage private customers, as the group’s rivals currently provide services only for businesses and local authorities.

Abstracted from Handelsblatt