Following consultation, Postcomm has today published a decision document setting out its conclusions and recommendations on tackling the barriers to entry in the postal services market that were identified in its Competitive Market Review published in November 2005.
P:LibraryPostalPostComm Formal DocumentsCompetitive_Market_Review_ final_decisions_Apr_2006.pdf
Read MoreThe European Commission (EC) wants to give TPG Post, the mail business of Dutch mail and logistics group TNT NV, and other foreign competitors an equal chance on the German and UK postal markets while abolishing the payment of value added tax (VAT) on mail services, the EC said on April 10, 2006. An exemption from VAT on these markets has been granted only to the former monopolists Deutsche Post and Royal Mail for most of their services. According to the European Commissioner Laszlo Kovacs (fiscal affairs), the VAT differences are not in line with the European Union (EU) competition rules.
Read MoreThe European Commission began moves towards possible legal action against Britain yesterday, accusing it of giving Royal Mail unfair tax advantages over its rivals. Brussels is challenging a UK decision to exempt most of Royal Mail’s activities from VAT, although the tax has to be paid by companies offering the same services. Similar legal action is being brought against Germany. Announcing the move, Laszlo Kovacs, the Taxation Commissioner, insisted that any VAT exemption for postal services had to be properly applied to “minimise distortions of competition in a liberalised market between former monopolies and market entrants”. Under European legislation, former postal monopolies have not had to pay VAT if they provided general services of public interest, such as the delivery of letters for the same price anywhere in their country. In Britain, Royal Mail is regarded as a universal service provider and as being entitled to exemption from VAT.
Read MorePostal liberalisation is revolutionising the UK’s mailing house market. It may put smaller firms out of business and encourage consolidation, but canny operators that rise to the challenge will survive and could even benefit from the competition, writes Alex Blyth.
The mailing house as we know it is becoming a thing of the past.
Postal deregulation, which came into force on 1 January, will change the shape and nature of the industry forever. It will put some mailing houses out of business, and many of the smaller ones will need to merge or align themselves with postal carriers in order to survive. Those who do survive will find their role significantly altered, as clients increasingly ask them for advice on which postal carrier to use. Quite simply, this is an issue that no-one in the mailing house sector can afford to ignore.
Read MoreThe European Commission has sent formal requests for information to the United Kingdom, Germany and Sweden on the VAT application of postal services. The United Kingdom and Germany exempt from VAT all or most postal services supplied by their former postal monopolies, while Sweden does not exempt postal services. Current VAT legislation is not yet adapted to the postal market that was liberalised by Directive 97/67/EC. The Commission, awaiting the revision of the current legislation according to its proposals , has to ensure a proper application of the VAT postal exemption in order to avoid distortions of competition between former monopolies and market entrants. The requests take the form of letters of formal notice, the first stage of the infringement procedure laid down in Article 226 of the EC Treaty. The Member States involved are invited to reply within two months.
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