Financial Times FT.com

Threat to scrap Royal Mail's tax exemption

By Sarah Laitner in Brussels and John Willman in London

Published: July 25 2007 03:00 | Last updated: July 25 2007 03:00

Two of Europe's biggest postal operators should be stripped of tax exemptions worth hundreds of millions of pounds a year because the measures hinder competition, Brussels has warned.

VAT breaks given by the UK and Germany to Royal Mail and Deutsche Post respectively violate the union's internal market rules, Laszlo Kovacs, European Union tax commissioner, claimed yesterday.

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