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.

Posted on October 30, 2023 at 7:10 AM24 Comments


Johnson October 30, 2023 8:45 AM

The Canary Islands, Heligoland, and Büsingen am Hochrhein are also not part of the EU for tax purposes.

Clive Robinson October 30, 2023 10:04 AM

@ Bruce,

I remember that there was a VAT dodge from the Channel Islands. It had a similar VAT opt out to protect it’s fragily trade including floweres.

But… Some online retailers of CDs and DVDs and similar low cost low transport cost items started using it as a base to mail out from to grab the VAT thus have a competative price structure.

A quick “google” gave,


There are other Islands and Principalities in the EU region with similar but different VAT rules, which makes EU VAT difficult at times.

But VAT is one of those taxes that just attracts fraud… In the EU one type is known by some as “Carousel Fraud” and half a decade ago it was estimated it cost the EU 60billion which is not a small sum,


Peter Galbavy October 30, 2023 11:49 AM


For those not familiar with our wonderful system, it’s worth pointing out the two types of fraud – evasion (avoidance of VAT is just legalised evasion) and fraudulently claiming payments for transaction that never really occurred.

VAT is not like sales tax in the US, but instead (and I am sure someone educated in economics can formally name it) a stepped tax, where each layer in the supply chain charges it, but everyone except the final consumer can claim back their part of the payment.

Stacy October 30, 2023 11:55 AM

As far as “hacking” goes, this seems a little weak. Someone just has to notice it, and then it catches on, with no real work or cleverness involved. I live on Ontario, Canada, a few kilometres from Quebec, and it’s no secret that people cross the river to stock up on alcohol there—or to get drunk at 18 years of age, the drinking age being 19 on this side of the border. When I was younger and lived closer to the U.S., and one could cross that border with just a verbal declaration of citizenship, my parents would often take the family there to get alcohol among other things. A minor hack, because each extra person in the car increased the amount of stuff we could bring back duty-free (not officially unless the trip was more than 24 hours; but, unofficially, “everyone” was making those day trips, the bridge lines were often over an hour long, and the agents weren’t gonna send people to the customs office for declaring a case of beer and a week’s worth of family groceries).

I know U.S. alcohol laws can be strange, and, like tax rates, can vary significantly between states. So, with no checkpoints between the states, I imagine inter-state shopping is extremely common there, and I know some popular shopping areas are built very close to borders. And 15 years ago, Internet-based shopping sites would locate themselves in low- or no-sales-tax states so that all American shoppers could get stuff tax-free (again, often unofficially: the news stories about this would generally note that residents were required to calculate and submit local sales taxes for out-of-state purchases… and that very little money was ever collected this way).

As for more interesting Scandinavian hacks, how about the Swedish A-Traktor or Epa-traktor? These can be driven with only a moped or tractor licence, available from the ages of 15 or 16 years respectively, whereas one needs to be 18 to get a regular driving licence. But there are legal definitions of “moped” or “tractor” to meet, which is where the hacking comes in: the kids try to modify these to be as close to “real” cars as legally allowed (or whatever they think they can get away with). There’s apparently been a long-running dance between the regulators and car-hackers as rules have changed. For a while, one had to find and modify an old farm vehicle, but as of a few years ago, pretty much any vehicle can be used as long as all but 2 seats are removed, its speed is electronically limited, and a trailer hitch and reflective warning triangle are added.

Peter Gerdes October 30, 2023 12:03 PM

If the purpose of the law was to support the Island’s economy through it’s special tax free status is this hacking or the intended application of the law?

Clive Robinson October 30, 2023 1:20 PM


Re : Vehicle licencing restrictions.

“But there are legal definitions of “moped” or “tractor” to meet, which is where the hacking comes in: the kids try to modify these to be as close to “real” cars as legally allowed (or whatever they think they can get away with).”

This happens,in one way or another in many European Countries to my knowledge, and certainly some others, so I assume it’s a world wide issue in one way or another.

In the UK there is an age as in many countries that you have to be to drive on public thoroughfares.

However in the UK what you do with regards driving vehicles on private property even if it’s open to the public has not age restricted, which is why some of our Formular One racing drivers started at a very early age.

Similar is true for certain farm vehicles… But the vehicles are not “licenced” but are alowed to de on public roads for the likes of “farm related” and “Nature Maintainance”.

You might have heard of Sir Bob Geldof who in the 1970’s was lead singer of “The Boomtown Rats”. Well when to young to hold a drivers licence he worked as a “road navvy”, part of which was driving massive earth moving equipment, and also other construction equipment on public roads. As he noted on “Top Gear” some years ago there is part of a UK motorway he can “call his own”…

So there are plenty of loop holes, a more modern one of which relates to Electric Bikes. New bikes for retail sale had to comply with all sorts of restrictions but bikes you made yourself –or “friends”– did not. Which is why you will fing videos on YouTube of people on electric bikes overtaking motor bike and cars… Because another legal loop hole did not require pedle cycles to have speedometers, thus legaly could not be prosecuted for speeding. A friend built an electric bike, that at top speed did atleast 50mph but was also geared such that it could have quite a lot of torque and thus could also pull an enclosed four wheel trailer that two large adults could sit in… Yup total madness but the trailer was what he did his “out of town shopping” in and carried his tools in as a self employed builder/gardener.

A friend used to be the secretary of the British Electric Bike Club back in the last century when they were little more than the equivalent of the French friction drive bikes. He tells other “free-booting” stories from when the electric hubs from China first appeared. Some of which as they say “might change the colour of your hair”, they certainly made me laugh.

Sadly or perhaps wisely some of the rules –but not all– have changed due to “Nanny State” type politicos, looking for a way to protect lucrative tax revenue etc as well as stick “number plates” on bikes to “track you down”.

Stacy October 30, 2023 2:10 PM

another legal loop hole did not require pedle cycles to have speedometers, thus legaly could not be prosecuted for speeding

It’s interesting they considered that a loophole. Here, bicycles can be prosecuted for speeding, despite no requirement for speedometers. It’s not really a concern for fully-human-powered bicycles, of course; the type of cyclist going at dangerous speeds in residential areas can probably be more easily ticketed for running a stop sign, failing to yield, or the like.

On the topic of pedal bicycles, I don’t know if this is a local pecularity or is seen in your area: some electric “bicycles” resemble scooters or mopeds but have vestigial pedals on them, usually not even mounted but just zip-tied near the attachment point. Thus they are electrically-“assisted” pedal bicycles under the law, and require no license. Maybe it affects import duties or tax deductions too.

The licensing of (true) pedal bicycles is occasionally proposed for safety, though studies have shown it has basically no positive effect. For environmental and traffic reasons, it’s probably a bad idea to license electric bicycles, though requiring manufacturers to speed-limit them seems unoffensive. Maybe someday we’ll need to worry about loopholes around home-made or modified devices here; for now, I see little evidence of a problem. I don’t see kids driving “farm vehicles” either. (I did once see a person operating some type of slow-moving hacked-up bicycle-golfcart hybrid on a bike path. Not a minute later, I was surprised to see a bicycle cop pass it and make the person pull over—the first and only time I’ve seen evidence of enforcement activity on a path.)

This talk of tax-hacking reminds me that it’s about time for me to figure out the optimal amount of taxable income I should obtain before the tax year ends at the end of December.

John Parker October 30, 2023 2:24 PM


I know U.S. alcohol laws can be strange, and, like tax rates, can vary significantly between states. So, with no checkpoints between the states, I imagine inter-state shopping is extremely common there, and I know some popular shopping areas are built very close to borders.

Massachusetts has high liquor taxes, New Hampshire has no liquor tax on wine & liquor and the state operates the liquor stores, so New Hampshire built two stores that are their own exits off Interstate 95 between Massachusetts and Maine – for the convenience of those heading off to, and those returning from, Vacationland. At the time of this NY Times story the northbound store was the highest grossing in the state, although it’s now been surpassed by a new bigger store in Portsmouth (also conveniently off I-95).


Stacy October 30, 2023 3:12 PM

John, that’s a nice example of externalities too. The usual excuse for high taxes and other restrictions around alcohol—like being sold exclusively by the government—is that alcohol is damaging to society. Liquor stores that are only accessible by inter-state freeways get the money, while basically exporting the problems; people without cars can’t even get there. I imagine a state could go even further, and collect taxes on most in-state sales while making border stores tax-free.

Clive Robinson October 30, 2023 6:24 PM

@ Stacy,

Re : Bad to the bone…

“The usual excuse for high taxes and other restrictions around alcohol—like being sold exclusively by the government—is that alcohol is damaging to society.”

In times past it was known as,

“The poorman’s painkiller”

But medically it’s not realy something you want to be ingesting. Over the past five decades it’s gone from things like red wine is good for you in small quantities to alcohol is bad for you at almost all levels.

I hardly ever drink these days, not just because it’s way to expensive to drink, but more importantly I found out when young I don’t get even merry without drinking a considerable quantity of beer etc, well beyond the X units a day. Also I’ve never got drunk enough to forget, so it can be quite embarrassing when others either have or are faking it…

I don’t smoke because the actual smoke causes me to have nose bleeds which realy put a crimp in my social life when young. Because in most pubs and clubs the air was blue from the ceiling down to waist hight or lower. And it was never fun cuddling up to someone who stank like an ashtray.

So that’s two of lifes most dangerous vices I don’t partake of. As for the others… Lets just say because I indulged in atleast one, I needed to walk twenty miles, run upto ten miles or cycle over a hundred miles every day to keep my sails in trim.

Jj October 30, 2023 11:40 PM

I’ve been to Åland and the alcohol prices are the same as finland or sweden. You still have the state monopoly of alcohol sale (Alko). For example:

Alko Maarianhamina Sittkoff

See the prices, a simple bottle of wine is 25€.
Also Åland is tiny with a tiny Alko store, there is not a lot if traffic of people buying anything, just few tourists in summer mostly.

TL October 31, 2023 1:50 AM

Note that the tax hack is not about sales of alcohol on Åland itsef, but rather on the ferries stopping there. The alcohol sold on the ferries can be sold tax-free because of that extra stop, because the ferries “leave” EU tax zone by stopping at Åland.

Dave October 31, 2023 3:50 AM

This “hacking” has been going on from Sweden to Denmark for ages, thus the saying “Keep Denmark beautiful, carry a drunk Swede to the ferry”, (that’s the HH ferry, further south you have the Øresund bridge to carry them to).

Jon (a different Jon) November 1, 2023 12:57 AM

Of course, all this stuff is an excellent argument for a World Government, with actual teeth to enforce certain regulations.

In the USA, people used to be able to run away into the ‘Territories’ to escape state crimes. Now there’s nowhere left to run to – and the criminals actually do get caught.

There’s something to be said for an organized planet that doesn’t have anywhere for a felon to run to. That said, I’d personally much prefer a World Government organized along, say, Swedish lines over than one based along, say, Saudi Arabian lines.

Clive Robinson November 2, 2023 9:36 PM

@ Stacy,

“[The] driver admitted it was not for his personal use”.”

With “326 cases of beer” it would be a bit difficult to say it was “personal use” only.

I don’t know how many units of alcohol there are in a “Canadian case” but I’m guessing if you tried to dring a whole case every day, which 326 cases would imply, it’s enough to,

1, Make you terminally incapable.
2, Give you metabolic syndrom or worse.

So the driver did not think it through…

Stacy November 2, 2023 10:38 PM

I read the “not for personal use” claim as dry humour. The number “24” is visible on some of the boxes shown, so we’re talking about nearly 8,000 beers or 2,700 litres (at around 5% alcohol by volume)—that wedding would’ve been a night to forget.

Didn’t think things through? Did you notice that the truck was only stopped because the tire had disintegrated, and the person drove on the wheel to the point that it had also mostly disintegrated, leaving a visible track leading right to it? Beer is not what this person needs.

Clive Robinson November 3, 2023 6:31 AM

@ Stacy,

“Beer is not what this person needs.”

Back a long time ago, when we were wearing the green before the “Darwin Awards” and “one flew over the cuckoo’s nest” was still a movie most had seen. There was a saying amoungst soldiers that got used for people that behaved in a way that others thought was “terminally stupid”. Which was,

“The person most in dire need of a full frontal lobotomy”

Which obviously got shortened to a question of,

“Full frontal?”

And then for some unfortunates became their “cursed name” as in, if a job that nobody wanted to do had to be done you would hear,

“Just the job for ‘full frontal'”

Or similar.

Lets just say that I can see that driver becoming “A recipient of a Darwin Award”, in the not to distant future.

tim November 6, 2023 9:54 PM

A missed opportunity is not mining the comments of this blog and creating a book of the most delusional takes. This thread alone is full of them.

SID November 6, 2023 10:28 PM

Oh look it’s The Idiot of Mankind ‘TIM’ is back again. Trying to sneak in a snarky via the back door.

A little lyric or two for you,

Popping in and out each week Spoiling every lovely execution La, what a cheek!

We see him here, we see him there Those foreboding see him everywhere.

If you should see him, please do give a shriek! That demned elusive Pimple-Squeak.

We see him here, We see him there. Those foreboding see him everywhere.

Oh, Pimpy, how the forboding do implore you, simply to stay home in bed. With all your interference
It’s a chore to get a head!

(with apologies to Baroness Orczy and others)

Hakan November 8, 2023 9:14 AM

I live in the Åland Islands and I can tell you that the biggest hack is calling it “tax-free” to make people buy lots of it. Because, yeah, it is tax-free, but the shipping companies add quite a nice markup on the prices, so it’s not actually as cheap as land prices with the VAT deducted. Other products in the ferries’ shops, like candy, are often more expensive than in normal stores, but people buy it anyway because, hey, it’s tax-free!

And then while you are on these cruises that take somewhere between 5 and 24 hours, of course you’ll want to visit the ferry’s restaurant to enjoy some “tax-free” food, costing more than on land. How about a bottle of water? Only 3€! Tax-free!

In the good old days, the ferries had prices actually reflecting them being tax-free, but at some point they learned that people are stupid.

Clive Robinson November 8, 2023 10:53 AM

@ Hakan, ALL,

“In the good old days, the ferries had prices actually reflecting them being tax-free, but at some point they learned that people are stupid.”

Some say,

“Never look a gift horse in the mouth!”

I say “Check the horses guts for parasites or worse.”

Because I prefere Virgil’s,

“Beware of Greeks bearing gifts”

I used to work in the Oil Industry and part of that was occasionally working on “tankers” that had a “Captain’s Bond” from which you could buy.

At that time a decent bottle of Whisky in a UK shop was ~30UKP from the Captain’s Bond it was ~2UKP.

I also had a little “side line” in “empty whisky bottles” to certain Nordic Countries. The price of a half decent whisky was beyond what most would want to spend… But decant a bottle of cheap whisky into an expensive bottle and leave it prominently on your sideboard… So even empty bottles had value.

But the thing I most often took in and customs did not care about were very large catering tins of Nescafé instant coffee. You told them you were working there for a month and you could not stand the XXX brand in the office, they would even look sympathetic.

But the funny/spooky one was a 2ltr bottle of a very well known “cola”. I was travelling out to a rig by hellicopter and they “impounded it”. Apparently some workers used to drill holes drain out the contents and inject vodka or similar back in then seal the hole. They said I could pick it up on my way back…

Well I came back on a day when nobody with a key to the lock-up was around, so I just left it there… Big mistake that bottle of cola became like a millstone around my neck. I kept getting called back to the rig as they upgraded it, because they kept loosing the paperwork or some such. I’d always end up going back at irregular times so nobody was ever there with the key. Back and forth all through the summer this went on… Eventually I came back on a regular flight and there was someone with a key… I got the bottle and drank it on the train on the way out from Lowestoft back the slow 100miles back to London rather than carry it on the Underground. Any way miraculously no more calls to go back to that rig that summer.

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