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Finland tackles tax evasion by online vendors of alcohol

Xinhua, January 10, 2016 Adjust font size:

Finnish customs will start collecting millions of euros in unpaid alcohol taxes from mail order vendors in other European Union(EU) countries.

Following an advance decision in November last year by European Court, Finland will enforce Finnish alcohol taxation retroactively from 2013 on deliveries by foreign online sellers to customers in Finland, customs officials told local media on Saturday.

Finnish customs has already been sending invoices to foreign online alcohol retailers, but very few have been paid. Harsh enforcement was delayed pending clarification of the legal situation.

Customs inspector Seppo Raitolahti told Finnish broadcaster Yle that around 100 companies in the EU have been selling alcohol to individuals in Finland. The annual loss of tax revenue has been estimated at 8 to 10 million euros (8.74 to 10.93 million U.S. dollars).

European Court ruled in November, 2015 that the current Finnish alcohol legislation was in line with EU Law. The court took up the matter as a Finnish court wanted an advance stance from the EU level to help in dealing with a local complaint.

Finnish alcohol legislation is ideologically based on trying to minimize the health problems caused by alcohol. Alcohol is highly taxed and retail sales of strong beer, wines and hard liquor is restricted to state monopoly stores.

Finnish customs has chosen not to confiscate alcohol packages even though it could legally do so. Thus clients have been able to collect their merchandise and customs has, however, taken note of the online shops and sent tax invoices to the sellers. The legal framework remained unclear until the EU Court decision.

The huge differences in taxation in EU countries can make purchases lucrative. For example, the German retail price of a can of beer can be 30 cents, but in Finland that of the same product could be over three euros. Enditem