VAT exemption for postal services according to current legislation

Those who wish to send large quantities of mail usually hire a service provider. Since the revision of the Postal Modernisation Act in July 2024, it has become common for postal service providers to submit inconsistent bids in tendering procedures with regard to the VAT exemption or liability of the services offered.

This has led to uncertainty about which services are VAT-exempt and which are not. Some offers include VAT, while others do not. This not only makes it difficult for tenderers to compare offers, but also raises questions about possible additional VAT claims. We explain the most important aspects below.

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Tax-free universal postal services

Tax-exempt universal services generally include:

Services related to the collection, sorting, transport and delivery of postal items.
The transport of letters, parcels and goods and the formal delivery of documents for shipment tracking, provided that these are not considered additional services.

A universal service is therefore provided if

Delivery time targets of at least 95 per cent on the third working day (E+3) and 99 per cent on the fourth working day (E+4) on an annual average exist, and
postal services are provided at an affordable price, thereby ensuring comprehensive coverage of postal services. According to the tax authorities, a price is affordable if it corresponds to the average capacity of a private household with average demand.

An additional formal requirement for tax exemption is that the postal service provider undertakes to the Federal Central Tax Office to offer postal services (universal services) throughout the territory of the Federal Republic of Germany and, in this context, applies for a certificate exempting it from value added tax.

Taxable services

Services that do not meet the objective of providing comprehensive postal services at an affordable price are generally subject to tax.

Examples of this are letter mail items that

be transported according to higher quality standards, for example, particularly fast delivery for a higher fee,
Parcel shipments that are transported at different rates for special groups (e.g. business customers, bulk senders) and • Shipments that are transported under individually agreed terms and conditions.

Challenges in demarcation

Classifying services as taxable or tax-exempt requires, above all, a clear distinction between partial services, i.e. individual components of the transport service such as collection, transport or delivery, and additional services to universal services. If these additional or partial services exceed the above-mentioned level of universal service, VAT is generally payable on the entire postal service.

Dealing with the existing uncertainties in assessment is made particularly difficult for tendering companies by the fact that only postal service providers can apply to the Federal Central Tax Office for the certificate required under Section 4 No. 11b sentence 2 of the Value Added Tax Act (certificate of tax exemption for postal service providers). The tendering companies therefore initially have no influence on whether the postal services offered are tax-exempt and whether the offers from postal service providers are comparable.

What companies can do

Companies that send or tender large volumes of mail should check each service offered individually. This can be done, among other things, by specifying the tendered service description, requesting proof of VAT exemption from the bidding companies during the tender process, or entering into contractual agreements on the tax classification of the postal services offered. This ensures that the tendering and administration of postal services are carried out in a legally compliant manner. We are happy to assist you in this process.