German VAT may force Deutsche Post to increase prices

Deutsche Post, the German postal service operator, has indicated that it is not fundamentally opposed to plans by the EU to impose VAT on stamps with the planned deregulation of the EU postal market in 2009. The company has not yet decided whether it will increase prices when VAT is introduced.

Currently, while private delivery services pay VAT on letters, state post offices are exempt. Brussels does not expect the introduction of VAT to affect prices, arguing that pre-tax deduction will be possible, but the German postal service association has expressed doubts regarding this argument.