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European Commission v Kingdom of Sweden

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In European Commission v Kingdom of Sweden (C-114/14) (21 April 2015), the CJEU found that the provision of postal services by a privately owned ‘universal service provider’ should be exempt from VAT.

The European Commission sought a declaration that, by failing to exempt from VAT the supply of postal services (other than passenger transport and telecommunications services) and the supply at face value of postage stamps, the Kingdom of Sweden had failed to fulfil its obligations under the Principal VAT Directive.

The Kingdom of Sweden considered that since it had ended its monopoly in 1993, there had no longer been a ‘public postal service’ in Sweden; and so the VAT exemption no longer applied. The CJEU pointed out, however, that the term ‘public postal service’ covered both public and private operators; and that Posten AB had been designated as a ‘universal service provider’ in Sweden. It therefore supplied the ‘universal postal service’, which must be exempt from VAT.

The CJEU rejected arguments to the effect that the exemption would distort competition, pointing out that Posten AB was subject to a specific legal regime as a universal operator.

Finally, and for the same reasons, the CJEU held that the supply of postage stamps should also be exempt.

Read the decision

Why it matters: The CJEU stressed that what mattered was neither the nature of the services provided, nor the fact that the operator was privately owned. The key was that the operator was classified as a ‘universal service provider’ subject to specific obligations.


Business taxes

Indirect taxes

Administration and appeals

Issue: 1260
Categories: Cases , Indirect taxes