Berlin ponders mail VAT move
The German government is considering exempting private-sector postal operators from value-added tax in order to improve their competitive position with Deutsche Post, the former monopoly, three months before the liberalization of the German letters market.
A spokesman for chancellor Angela Merkel told the FT that Berlin was reviewing ways to “correct competitive distortions” in the postal market. “The review includes the different tax treatment of affected companies.”
Currently, only Deutsche Post is exempted from VAT in its letters business on the ground that it provides a universal public service – a mandate that includes the obligation to serve remote and thinly populated parts of the country.
Competitors, including Pin, a joint venture created by large publishing houses, and the Netherlands’ TNT, have long complained that the exemption gave Deutsche Post, which controls 91 per cent of the German letters market, an unfair competitive advantage.
Their complaints grew louder this summer after the government decided to impose a minimum wage on postal services. The government plans to use a 1996 law that allows it to declare a wage deal between the trade unions and employers in any sector as legally binding for all companies in this sector.
