In line with temporary VAT cuts that kicked in today, Deutsche Post and DHL have today announced that they will be passing on the temporary VAT reduction that is part of the German Federal Government stimulus roll out to its German customers. This VAT reduction will apply to numerous postal services they provide but not to universal postal services which are VAT-exempt by law.
What is the change?
According to DHL the value-added tax (VAT) in Germany will be going from 19% to 16% for the regular rate and from 7% to 5% for the reduced rate for the period July 1, 2020 to December 31, 2020.
The price of numerous domestic and international products and services will now fall in line with this VAT reduction and some of the services that will be impacted include, Plusbriefe and Packsets, ExpressEasy for private customers, business-customer products such as letter mail communication, as well as parcel, dialogue marketing and Express products.
What about universal postal services?
Universal services exempt from VAT by law such as individual letter mail items and parcels up to 10kg will not be impacted by the lowered VAT.
Customers will be informed about the temporary price adjustments to postal services via posters in postal retail outlets. However, the most commonly requested products in postal retail outlets are traditional universal postal services – and as such exempt from VAT. These products will not be subject to any change in price. In light of this, customers will not require to purchase top-up stamps following the introduction of the VAT reduction measure as it will not impact postage rates for these products.
Customers who frank their shipments will also remain unaffected by the VAT reduction as transport franking charges via IT franking and franking machine are always processed as a net charge, with VAT invoiced separately.
For further information visit deutschepost.de/vat and dhl.de/vat.
