Hermes wants VAT exemption for consumer parcels
German parcels carrier Hermes Logistik has officially applied to the German finance ministry for VAT exemption for its consumer parcels service in order to match the status of Deutsche Post and reduce a 17pct cost disadvantage.
Hermes said that in the market segment for parcels up to 20kg it currently has to charge VAT while Deutsche Post has VAT exemption on the grounds that it provides a universal postal service. But Hermes said its consumer parcels service is effectively a “universal service” since it provides nationwide coverage through its 13,500 ParcelShops and home delivery network.
“The one-sided exemption of Deutsche Post from VAT is not in line with European law or the principle of neutral taxation,” declared managing director Hanjo Schneider. “The resulting disadvantages for other market participants, especially for pricing, are massive and lead to unacceptable competitive distortion.”
The European Commission is already investigating Deutsche Post’s VAT exemption, and German chancellor Angela Merkel also said it needed to be examined following the decision in favour of compulsory minimum wages in the German postal market from January 2008 onwards.
