Germany plans to limit D.Post tax privileges-paper

Germany’s Economy Ministry plans to curtail the tax privileges of Deutsche Post DPWGn.DE so that only postage stamps will be exempt from value added tax (VAT), a German newspaper reported on Tuesday.

Competitors of Germany’s biggest mail delivery company have complained that Deutsche Post has an unfair advantage over them because it is the only firm which has enjoyed sweeping VAT exemption privileges.

According to internal Economy Ministry documents obtained by Financial Times Deutschland newspaper, the ministry plans to help level the playing field by limiting Deutsche Post’s VAT exemption to postage stamps.

This means that mass mailings without postage stamps and other postal services will no longer be exempt from VAT.

Deutsche Post loses its domestic mail monopoly next year.

However, German government plans for a minimum wage in the postal sector have made rivals rethink their challenges to Deutsche Post when its monopoly ends.

One of Deutsche Post’s main rivals, mail delivery company PIN Group, said last week it will have to cut more than 1,000 of its 9,000 jobs in Germany due to Berlin’s plans to put a floor under wages in the sector.