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Helsinki District Court issues a positive ruling for Posti with regard to VAT case

18.09.2015

For the second time, the District Court of Helsinki has issued a positive ruling for Posti regarding a dispute concerning the compensation of value added taxes. Posti is not deemed liable to compensate value added taxes paid by its customers. According to the District Court, including the VAT in the postal services referred to in the case was not contrary to EU law. The plaintiffs consisted of seven large-scale financing and insurance institutions.

Posti's contract customers filed a claim with the Helsinki District Court for the damage of value added taxes of postal services totaling a little bit over EUR 100 million. The District Court already issued a ruling in the company's favor in the summer 2011. The Helsinki Court of Appeal overruled the District Court's decision and returned the case to the District Court, where proceedings were started in 2012.

The case is based on a ruling given by the European Court of Justice in 2009, clarifying the interpretation of the provisions regarding postal services in the EU VAT directive. Earlier, there had been differing interpretations, and, in Finland, all postal services were subject to VAT. After the ruling by the European Court of Justice, a tax change was implemented in Finland, making Posti's universal services VAT-exempt as of June 1, 2011. According to Finnish legislation regarding postal services, the invoiced contract customer services are not regarded as universal services. According to Posti, the definition of universal service as given in the Finnish legislative framework is not contrary to EU law. According to the preliminary ruling mentioned above, individually negotiated services cannot be VAT-exempt. According to Posti, customers' claims referred to these individually negotiated services, and the District Court of Helsinki confirmed this view.