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Finnish Customs net nearly two million euros in unpaid alcohol taxes from online stores

Online liquor sellers have had to fork out more than two million euros in unpaid taxes to Finnish Customs. The payout follows intense scrutiny of online alcohol sales by customs officials that began in 2016.

Alkoholia sisältäviä laatikoita tullissa.
Illegallly imported alcohol confiscated by Finnish Customs. Image: Suomen tulli

Finnish Customs announced Monday that it had raked in nearly two million euros in unpaid taxes from online retailers selling alcoholic beverages in Finland.

Last year customs officials stepped up their monitoring of online alcohol retailers as part of a programme targeting the so-called grey economy.

The online sting operation paid off for customs officials, who found that many online retailers had not paid up the required taxes on their liquor sales.

However Customs said that the two million euros it was able to recover may be just the tip of the iceberg. The agency estimated that delinquent online retailers could be cheating the state of as much as 10 million euros in unpaid taxes every year. Customs officials say that even this estimate is dated, given that the online alcohol trade has been growing rapidly.

Finnish Customs’ scrutiny of online retailers has focused mainly on large companies. The cases it investigated involved firms operating in Estonia, which have been running Finnish-language webshops that offer alcoholic beverages.

Taxman takes over from Customs

While Finnish Customs were able to recover millions in unpaid taxes from last year, the agency will not continue the practice. This is because the Finnish Tax Administration took over responsibility for collecting excise taxes and value-added taxes at the beginning of the year. As a result, the practice of collecting unpaid taxes has now been suspended.

"However taxation will continue under the tax administration after the quiet phase caused by the shift," explained senior inspector Seppo Raitolahti of the Finnish Tax Administration.

The process of recovering unpaid alcohol taxes from foreign online retailers was not a simple one, officials said. According to Raitolahti, this was not because of the legislation, but because the sellers are scattered across Europe.

"It’s not as easy as flipping pancakes, you can’t just begin claiming taxes. The websites are in all sorts of languages, there are many providers and they are dotted across the European map," he added.

The taxman added that in some cases, officials have noticed that retailers have managed to close down their online stores without paying taxes, making it more difficult to reach them.

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