EU commission criticizes Deutsche Post's VAT exemption

The EU commission is criticizing Deutsche Post World Net AG’s VAT exemption, Frankfurter Allgemeine Zeitung reported, citing a letter the commission wrote to the German government.

EU commissioner Charlie McCreevy has advised the German government not to hamper the opening of the EU’s mail markets by unfair regulation, it said.

Unlike its German competitors, Deutsche Post is exempted from charging value added taxes on its products in return for the universal service it offers to ensure mail is delivered to remote regions.

The German cabinet is set to decide on tax regulations for the German postal market over the coming days, the report said.

While finance minister Peer Steinbruck of the Social Democrats favours maintaining Deutsche Post’s tax privilege, economy minister Michael Glos from conservative bloc CDU/CSU favours abolishing it.

In addition to the VAT exemption, the government last fall decided to make mandatory for its competitors the minimum wages paid at Deutsche Post.