Deutsche Post DHL and Hermes pass on German VAT reduction to customers
Deutsche Post DHL and Hermes will both pass on tomorrow’s cut in German value added tax rates to business and private customers to reduce their mail, parcel and express costs.
The German government will reduce the full VAT rate from 19% to 16%, and the lower rate for certain products and services from 7% to 5%, from July 1 to December 31, 2020. The cut is designed to boost consumer spending and is a central element in a massive financial stimulus package designed to help the economy recover from the impact of the Covid-19 pandemic.
Deutsche Post DHL said that as a result, numerous national and international products and services for private customers will be cheaper from July 1 onwards. These include postal and parcel products as well as the express product for private customers, ExpressEasy, which can be booked in selected post offices and online.
Furthermore, the VAT reduction is being also implemented for business customer products subject to VAT in the areas of mail communication, parcels, dialogue marketing and express.
However, the tax cut has no impact on universal postal service products such as single letters or parcels without additional services up to 10 kg. This is due to the universal postal service being intended to provide the population with basic postal services, making it legally exempt from VAT.
Notices in the post offices inform customers about the temporary price adjustments for postal services. Since the most frequently requested products in the post branches are classic universal postal services that are exempt from VAT, there are no price changes for these.
Furthermore, there are no effects for customers when franking their shipments, e.g. via IT franking or franking machines, since the franking of the transport fee is always a net fee and VAT is invoiced separately.
Hermes expands consumer services
B2C parcels specialist Hermes will also pass on the VAT reduction and thus reduce prices for sending private parcels during the six-month period from July to December 2020.
Dennis Kollmann, Chief Sales Officer at Hermes Germany, commented: “Of course we’re interested in passing on the tax benefit to our customers. As a purely private parcel service, we are subject to VAT and are now pleased about the opportunity to temporarily offer our customers cheaper parcel prices in this way and to make private parcel shipping even more attractive.”
In terms of its services, Hermes follows the strategy of being close to consumers. For example, it has launched a newly designed Hermes app, through which customers can quickly and easily send private parcels.
Furthermore, the addresses can be conveniently imported from the contacts and thanks to the mobile parcel label, a printer is no longer required. In addition, the app not only finds the nearest ParcelShop, but also enables flexible forwarding of items.
In addition, the logistics company is gradually pushing ahead with the expansion of its already extensive ParcelShop network in Germany. By 2022, the current number of around 16,000 parcel shops is expected to increase to around 17,500.
This allows customers to access an even larger network to send parcels or to use the ParcelShop as an alternative delivery location and, at the same time, a customer-friendly addition to traditional door delivery.
Kollmann summarised: “Along with the reduced prices, our website and the app with features such as the mobile parcel label as well as the expansion of our nationwide network of around 16,000 parcel shops, enable the dispatch and receipt of shipments along everyday routes and at customer-friendly times. Our customers benefit from attractive, individual and needs-based shipping solutions.”
