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Deutsche Post DHL to pay €516 million in back taxes

By control on June 6, 2012

German authorities have ordered Deutsche Post DHL to pay €516 million in back taxes, a penalty covering the years 1998 through 2010. Although the payment settles a legal dispute initiated by European regulators, it comes at a heavy price — impacting the European mail and express delivery company’s earnings before interest and tax by €180 million in the second quarter of 2012.

Deutsche Post will make the one-time payment in the third quarter of 2012, according to a press release. The €516 million fee will also set back Deutsche Post’s net profit by €265 million. Even so, the company expects to post an EBIT in the €2.5 billion-to-€2.6 billion range for the full year, a forecast it previously announced.

In an official statement, Deutsche Post said that the German government deemed the half-billion euro payment necessary after retrospectively looking at a number of postal services that were previously exempt from value-added taxes.

The European company also announced that it wouldn’t appeal the fine. “Although many facts allow different interpretations in the application of EU and German VAT law on postal services, the group will accept the decision taken to establish legal certainty and avoid years of legal battles with uncertain outcomes,” Deutsche Post said in a statement.

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