Hacking Scandinavian Alcohol Tax
The islands of Åland are an important tax hack:
Although Åland is part of the Republic of Finland, it has its own autonomous parliament. In areas where Åland has its own legislation, the group of islands essentially operates as an independent nation.
This allows Scandinavians to avoid the notoriously high alcohol taxes:
Åland is a member of the EU and its currency is the euro, but Åland’s relationship with the EU is regulated by way of a special protocol. In order to maintain the important sale of duty-free goods on ferries operating between Finland and Sweden, Åland is not part of the EU’s VAT area.
Basically, ferries between the two countries stop at the island, and people stock up—I mean really stock up, hand trucks piled with boxes—on tax-free alcohol. Åland gets the revenue, and presumably docking fees.
The purpose of the special status of the Åland Islands was to maintain the right to tax free sales in the ship traffic. The ship traffic is of vital importance for the province’s communication, and the intention was to support the economy of the province this way.
Sidebar photo of Bruce Schneier by Joe MacInnis.
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