Each Member State of the European Union must fully apply EU law. The body responsible for identifying possible violations of EU law is the European Commission. Where a Member State does not apply EU law and breaches its obligations under the EU Treaties, the European Commission may open a formal infringement procedure under Articles 258 and 260 TFEU (see details on the infringement procedure here).
Council Directive 2006/112/EC (on the common system of value added tax) aims to gradually harmonise the individual national laws on turnover taxes in order to achieve a common VAT system in the EU and to respect the conditions of competition. Its provisions require each Member State to provide for an exemption from VAT for certain postal services in order to encourage certain activities of general interest. To this end, postal services which meet the basic needs of the population (so-called ‘universal postal services’) are exempt from VAT and are therefore offered at reduced cost. On the contrary, postal services whose conditions have been individually negotiated with customers, such as bulk mail, special discounts, commercial agreements with specific organisations, as well as other services which are not part of the universal postal service, are not eligible for exemption from VAT.
However, the Commission noted that Greece exempts from VAT all postal services provided by the Hellenic Post Office (ELTA), including those not included in the universal postal services. It therefore proceeded to send a letter of formal notice in June 2021. As the Member State in question has not aligned its national rules with the requirements of the Directive, the Commission took further action in 2022. As mentioned in the “July infringements package: main decisions/15-7-2022“, the European Commission sent a “Reasoned opinion”, requesting Greece to comply with the EU rules of Directive 2006/112/EC. [Infringement number: INFR(2020)4049].
The application of EU law is an obligation of the Member States of the European Union. If infringements of EU law are identified, the European Commission may take a series of actions against the Member State concerned to ensure the correct and full application of EU law by opening infringement proceedings under Articles 258 and 260 TFEU.
In this particular case, the European Commission sent a letter of formal notice under Article 258 TFEU and then a reasoned opinion to Greece, requesting it to comply with the provisions of Directive 2006/112/EC. This is because Greece exempts all postal services from VAT, not only universal postal services.
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