German postal service says it must retain tax exemption for business mail

DUESSELDORF, Germany, July 2 (Reuters) - Deutsche Post on Thursday defended its value-added tax exemption for business mail, pushing back against reported plans by the finance ministry to scrap the tax break in order to raise additional revenue.

* "The tax exemption is mandatorily prescribed under European law and linked to the provision of the universal postal service," the Bonn-based company said in a statement

* The company was responding to a report by the Spiegel news outlet that Finance Minister Lars Klingbeil plans to scrap the group's tax advantage when it collects and delivers business mail

* A draft document from the economy ministry dated June 26 said such a measure could generate around €115 million ($135 million) in additional annual tax revenue

* The tax treatment of Deutsche Post has been controversial for years, with Germany's Monopolies Commission among those having called for an end to the VAT exemption for business mail

* Deutsche Post has repeatedly rejected such proposals, arguing that it is the only postal and parcel service provider in Germany that carries out the costly universal service obligation

(Reporting by Matthias Inverardi, Writing by Friederike Heine; editing by Matthias Williams)