Federal government plans to abolish Deutsche Post's VAT exemption for business mail

Background: Dispute over competitive advantages in the letter market

The background is a long-running debate about distortions of competition in the letter market. According to reports, the regulation had given the Post a competitive advantage of 19 percent over its rivals. The Federal Association of Letter Services (Bundesverband Briefdienste), which represents the interests of the Post's competitors, had repeatedly criticized the tax exemption as unfair.

Lars Klingbeil can hope for additional revenue through the elimination of this competitive advantage in light of the tight budget situation. According to "Spiegel," the ministry puts this at 115 million euros. The draft provides for all market participants to be placed on an equal footing through the tax obligation in future, instead of granting a uniform exemption as before.

Reaction from Deutsche Post

Deutsche Post is fighting back against the plans. It pointed out that the tax exemption is mandatorily required under European law and tied to the provision of the postal universal service: "Die Steuerbefreiung ist europarechtlich zwingend vorgeschrieben und an die Erbringung des postalischen Universaldienstes geknüpft". The transport of business customer letters is also part of the universal service according to relevant case law.

The company, headquartered in Bonn, stressed that it is the only provider in Germany that ensures nationwide postal service to legally prescribed quality standards and with its own infrastructure. "Die Deutsche Post ist der einzige Anbieter in Deutschland, der die flächendeckende Postversorgung nach gesetzlich vorgegebenen Qualitätsstandards und mit eigener Infrastruktur sicherstellt." The regulation adopted in the 2024 Postal Act had clarified this legal situation based on European law.

Approval from competitors

Post called instead for reliable regulatory framework conditions for all providers: "Was der Markt braucht, sind verlässliche regulatorische Rahmenbedingungen für alle, die nicht gegen europäisches Recht verstoßen". The Ampel coalition had originally planned to exempt the group's competitors from the tax as well, but did not finalize the corresponding draft before the alliance collapsed.

Approval, however, comes from the Federal Association of Letter Services. Its representative Walther Otremba welcomed the move: "Der Vorschlag des Wirtschaftsministeriums zur Wiederherstellung gleicher, steuerlicher Rahmenbedingungen für alle Anbieter im Briefmarkt entspricht unserer Wunschlösung für das Problem". Otremba estimates the Post's previous tax privilege at around half a billion euros per year.

According to the association, however, nothing will change for citizens. "Für den normalen Briefversender ändert sich nichts, aber bei Geschäftskunden haben künftig wieder alle Brieflogistiker die gleichen Chancen", Otremba said. As a universal service provider, the Post is obligated to deliver letters and packages nationwide throughout Germany and to maintain letterboxes and branches.

It remains unclear when the draft law is to be introduced into the parliamentary process. The actual amount of additional revenue could ultimately deviate from the ministry's estimates, as it is unclear how the Post will respond to the changed conditions. "Spiegel" had previously reported on this.