Åland is a part of the EU, but is outside of the EU value-added-tax area. Åland is therefore classified as a third country regarding trade with the EU.
Åland’s tax exemption
When Finland became a member of the European Union, it also committed to applying tax systems according to EU directives in its indirect taxation. According to the Åland protocol in the Treaty of Accession, however, the Åland Islands is excluded from the application of EU VAT and excise tax directives. Thus the province of Åland, like the rest of Finland, is part of the customs territory of the European Community, but it is not included in the fiscal territory. 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.
Benefits of tax-free trade
Thanks to that special tax-exempt status, Åland Post can offer considerable competitive benefits for you as an online retailer. All products sold below a specific amount which are packed and dispatched from Åland are applied administrative relief known as LVCR (Low-value consignment relief).