BERLIN (dpa-AFX) - In the dispute over tax relief for Deutsche Post, the Bonn-based company has received a tailwind from the Bundesrat. On Friday, the chamber of states took a position on the reform of the Postal Act, which is to be completed by April. One controversial point is the question of whether Deutsche Post should be exempt from VAT on a large part of its letter business with corporate customers. This would put pressure on small mail competitors of the yellow giant. Criticism had been voiced from the federal states. However, a proposal to remove the aforementioned tax relief from the text of the law did not receive a majority in the state parliament on Friday. The federal government can therefore see itself vindicated on this point. The ball will soon be in the Bundestag's court for the reform.

The tax relief would only benefit the postal service, as it is a so-called universal service provider. The Bonn-based company has a market share of around 85 percent in the mail business, which is shrinking due to changing communication habits in the digital age. The smaller competitors, including Citipost from Hanover, PostModern from Dresden and Pin AG from Berlin, would still have to charge VAT according to the German government's reform proposal. Companies from certain sectors can later claim this VAT for tax purposes and get it back, so to speak. Financial service providers, public authorities and non-profit organizations, on the other hand, are not entitled to deduct input tax.

In 2010, the Federal Ministry of Finance estimated that the mail sector, which is the subject of this article in relation to Swiss Post, generated tax revenue of 300 million euros per year. More recent ministry figures were not available. According to current information from the Post Office, however, the amount is significantly lower, especially as the authorities that send their letters by post would not have to pay VAT. The state would therefore receive less revenue on the one hand, but would be relieved on the other.

The dispute over the question of whether the so-called partial services are exempt from VAT or not has already ended up in court. The Koln tax court ruled in 2021 that this business area should be exempt from VAT. However, this decision is not yet legally binding. The Bonn-based company also points out that EU regulations provide for a corresponding tax exemption and that national legislators therefore have no room for maneuver anyway. "In the enormously shrinking mail market, a reliable, affordable and socio-ecological universal service is dependent on framework conditions that provide relief," says the Bonn-based logistics company.

There is also displeasure about the postal law reform among magazine publishers. They fear that the quality of delivery will be reduced as a result of the reform and that many subscribers will no longer receive their printed magazines on the day of publication, but late. According to the reform proposal, the postal service will have less time pressure in future than before - as a result, items will be on the road for longer on average than before.

Subscribers are already being lost due to poor delivery quality, says Stephan Scherzer, Federal Managing Director of the Media Association of the Free Press (MVFP). The number of complaints then increases massively. These particularly loyal customers are highly sensitive when their favorite magazine arrives a day or two later than expected. Scherzer criticizes the fact that Swiss Post's competitive advantage over private providers in the letter business is being further increased. "That is incomprehensible."

Swiss Post, on the other hand, emphasizes that there will continue to be delivery on every working day. Customers will also have the option of having their items delivered the very next day - to a certain extent as a more expensive premium product, which Swiss Post claims will have an "affordable price". "It is obvious that such a faster delivery will cost more than a slower one and is now practiced in most EU countries," says a Swiss Post spokesperson./rin/wdw/DP/nas