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A Tax Paradise in the Making? Alcohol Regulations in the Åland Islands

When the European Union decided to end tax-free sales within the EU, it was considered such a serious threat to the welfare of the Åland Islands that its continuation was set as a precondition for a membership in the EU. To enable the continuation of tax-free sales a tax border was set, allowing tax-free sales on boat and air traffic between Åland and continental Finland. Tax-free alcohol has also to a large extent influenced the drinking habits of the Ålanders. About 30% of the alcohol consumed by Ålanders is bought on board the ferries. The tax border has its drawbacks, but the overall effects have been positive. For example, the number of passengers traveling to Åland from continental Finland increased by almost 50% from the previous year. The tax border also means that tax-free alcohol can be bought on almost all routes to and from Åland. It also seems certain that the easier access to tax-free alcohol will increase alcohol consumption on Åland.