New ferry route may remain tax-free

  • 2003-05-29

The Estonian ferry company Tallink is near an agreement with authorities in Finland's Ahvenanmaa region to reroute its Sweden-bound ferries through the region and maintain tax-free status after Estonia enters the European Union, the Finnish news service STT reported.

Ahvenanmaa, a self-governing archipelago of some 700 islands between Finland and Sweden, enjoys a special tax status within the EU.

Marek Magi, head of investor relations at Tallink, said the company had not signed any binding agreements yet but had been in negotiations.

"We don't want to enter into financially binding agreements until there's no doubt about Estonia's entry into the EU," he said. "First of all, Estonia's referendum has to be (held)."

The move would be a significant change in Tallink's strategy and is one way to preserve the lucrative duty-free trade on boats.

"Our Finnish and Swedish competitors use this opportunity and we, too, can't afford not to resort to it, otherwise we'll lose our passengers," he said.

Tallink will next year christen a new 2.35 billion kroon (150 million euro) passenger ferry the Finnish Aker Finnyards that will ply the Tallinn-Stockholm route. The boat will accomodate 2,500 passengers.