Berlin under pressure to end VAT exemption for Deutsche Post
The German authorities are coming under pressure from the EU Commission to impose VAT on the services of Deutsche Post, the country’s postal service operator and former state monopolist. Until now, most of the company’s services are free of VAT, but Brussels regards the situation as being of disadvantage to competitors on the market, such as the Luxembourg-based service provider PIN Group and the Dutch group TNT, both of which are subject to VAT.
The EU taxation commissioner Laszlo Kovacs therefore yesterday introduced infringement proceedings against Germany, and Berlin has two months in which to react to Brussels’ accusations. The EU authority explains that VAT exemption is permitted only in cases where the former state enterprise has duties in the public interest and must offer universal postal services. This applies, for example, to the mail delivery service in remote areas. However, it is explained that, in most of its universal services, Deutsche Post is in competition with other service providers.
Original article by H Hauschild and C Schlautmann
Abstracted from Handelsblatt
