Deutsche Post Defends VAT Exemption Amid German Finance Ministry Review
Overview of Deutsche Post's VAT Exemption Controversy
DUESSELDORF, Germany, July 2 (Reuters) - Deutsche Post on Thursday defended its value-added tax exemption for business mail, pushing back against reported plans by the finance ministry to scrap the tax break in order to raise additional revenue.
Deutsche Post's Position on VAT Exemption
* "The tax exemption is mandatorily prescribed under European law and linked to the provision of the universal postal service," the Bonn-based company said in a statement
Finance Ministry's Proposed Changes
Report on Scrapping the Tax Break
* The company was responding to a report by the Spiegel news outlet that Finance Minister Lars Klingbeil plans to scrap the group's tax advantage when it collects and delivers business mail
Potential Revenue Impact
* A draft document from the economy ministry dated June 26 said such a measure could generate around €115 million ($135 million) in additional annual tax revenue
Ongoing Debate and Industry Reactions
Longstanding Controversy
* The tax treatment of Deutsche Post has been controversial for years, with Germany's Monopolies Commission among those having called for an end to the VAT exemption for business mail
Deutsche Post's Counterarguments
Universal Service Obligation
* Deutsche Post has repeatedly rejected such proposals, arguing that it is the only postal and parcel service provider in Germany that carries out the costly universal service obligation
(Reporting by Matthias Inverardi, Writing by Friederike Heine; editing by Matthias Williams)
