DHL 2008 Annual Report Download - page 91

Deutsche Post World Net Annual Report 2008
On  November , the regulatory authority announced a benchmark deci-
sion specifying the conditions that apply from  until the end of  to regulation
under the price cap procedure for mail prices requiring approval.  is stipulates the key
factors applicable to mail prices as being the general rate of in ation and the expected
productivity growth rate for Deutsche Post . Prices have to be lowered if the in a-
tion rate in the reference period is less than the productivity growth rate speci ed by
the regulatory authority. Mail prices requiring approval remain largely unchanged in
.  e regulatory authority accepted an application from Deutsche Post  to this
e ect on  October .
 e third  Postal Directive came into force on  February .  e Directive
requires most  member states to open up their markets by , although the nine
most recent members plus Greece and Luxembourg have an option to delay opening
their markets until . Until then, the previous limits continue to apply across the
, with reservable services restricted to a maximum of  grams or two-and-a-half
times the standard letter price. It is now possible to plan with certainty for the future
regarding the date by which all national monopolies in Europe must fall.
Whilst liberalisation of postal markets poses risks for Deutsche Post  due to
increased competition in Germany, it also opens up new opportunities in other Euro-
pean postal markets. In , cross-border mail in Europe between Deutsche Post 
and  other Western European postal operators was governed by the   agree-
ment and with another eight Eastern European postal companies by the  
agreement.   is the successor to   and came into force retroactively
from  January .
Discussions continue regarding the extent to which postal services should
be exempt from value-added tax . An amendment to the Umsatzsteuergesetz
(German value-added tax act) currently in preparation will reduce the  exemp-
tion for Deutsche Post . A bill to this e ect was adopted by the German cabinet on
 September  and is set to become law on  January . Under the new rules, a
 exemption will only apply to speci c universal services pursuant to the  Postal
Directive that are not subject to individual agreement or provided on special terms, for
example, at discount rates.  e  exemption is to apply to any enterprise providing
all of these services nationwide in Germany.  e German legislative process may be
a ected by a European Court of Justice  decision expected for the second quarter
of . On  January , the  Advocate General delivered her opinion in the
case concerned, which relates to the  exemption for postal services in the United
Kingdom.  e German bill has yet to be passed by the Bundestag and Bundesrat.
Concurring with Deutsche Post , the regulatory authority considers that the
prices it approved are net prices not including .  could therefore be added to
the approved prices. However, it cannot be ruled out that the application of  would
lead to a decrease in revenue and earnings.
Group Management Report
Risks
87