Germany moves to end VAT exemption for business mail

BERLIN, Oct 14 (Reuters) - The German government plans to eliminate tax advantages enjoyed by Deutsche Post and some competitors for business customer mail.

• The German cabinet approved two proposals from the economy and finance ministries.

• The amendment to the Postal Act would remove VAT exemptions for business mail, aiming to boost competition and create a level playing field for postal operators.

• Business customer mail services offered by DHL's Deutsche Post and some competitors are exempt from value-added tax, while the services of other competitors are not.

• In parallel, VAT regulations will be aligned with European Union law.

• Deutsche Post criticised the plans, saying business mail is part of basic postal services that enjoy tax exemptions. "Letters – particularly those from banks, insurance companies and the government – would become needlessly more expensive, further accelerating the shift to digital alternatives," it said.

(Reporting by Holger Hansen, additional reporting by Tom Kaeckenhoff, writing by Linda Pasquini, editing by Thomas Seythal and Matthias Williams)