German government abolishes Deutsche Post’s VAT advantage

The German government has agreed to abolish the VAT exemption that Deutsche Post offered large companies for mail services. The finance ministry said on Wednesday (16 December) that Angela Merkel’s Cabinet decided that as of July 2010 companies will need to pay the VAT, and the exemption will only be applied to private customers whose business is a “fundamental service”.

In September, the European Court of Justice ruled that Germany’s postal exemption regulations did not go far enough to ensure a level playing field in the postal market.