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EU legislation

The exemption extended to certain postal services stems from Archived Directive 2006/112/EC, art 132(1)(a), which (as it stood at IP completion day¹) exempted 'the supply by the public postal services of services other than passenger transport and telecommunications services, and the supply of goods incidental thereto'. Unusually, the exemption is primarily limited by reference to the provider being subject to a special legal regime with specific obligations, rather than by the nature of the services provided. The UK legislation uses the term 'public postal services' to mean the services provided, whereas in EU legislation the term refers to the provider of the services (the UK refers to the 'Universal Service Provider', ie Royal Mail). The purpose of the exemption, when interpreted in accordance with Archived Directive 97/67/EC, art 3² is that of offering postal services which meet the essential needs of the population at a reduced cost³.

In May 2003, the European Commission proposed legislation⁴ aimed at removing the exemption for postal services,