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VAT could be added to mailshots in 2009

The European Court of Justice (ECJ) will review VAT on post charges in 2009.

This could mean that some postal services which are currently exempt will then attract VAT.

The ECJ is expected to endorse European Commission-backed changes which would lead to higher prices for mailings due the imposition of VAT fees.

Tim Walsh, of mailing industry leader Pitney Bowes, speaking at the Postal Economics Forum, said that the European Union’s vision of tax neutrality could lead to extra charges.

He said that companies which use mailshots for targeting prospective customers pay for these postal services based on the convenience and efficiency of the different payment channels (stamps, meters and PPI).

He said: “Any EU-wide basis for ongoing exemption of some postal services must be channel neutral. It would not be good for mailers or for posts if there was a discriminatory imposition of VAT on the same or functionally substitutable postal products.

“Any decision by the ECJ on postal VAT in 2009 is likely to raise significant pricing and implementation issues for posts and mailers alike."

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