Åland, in Finnish Ahvenanmaa, is a small archipelago area with less than 30,000 people. Autonomous since 1921 and demilitarized since 1856.
Part of EU: Yes
Member of Schengen area: Yes
Part of Nordic passport union: Yes
Part of EU Customs union: Yes
Part of EU VAT Area: NO
Own flag, own post system with own stamps, own internet country code. No own money, no own telephone country code.
The main reason not belonging to the EU VAT Area is traffic: The islands are fully dependent on the good sea connections to both Sweden and Finland. The arrangement allows the tax-free sales at the ferries between Finland and Sweden if the ferries make a stop at Åland, thus making the frequent all-year services profitable. In addition, Åland is the home base of the Viking Line shipping company.
The autonomy does not mean Åland being authorized to make any laws. The autonomy basically covers areas like education, culture, health, traffic, environment, local administration, police, post, radio, and television. In many "hard" areas, the Finnish jurisdiction applies: constitution, freedom of speech, foreign policy, crime, taxation with exceptions, defense (taking the demilitarized status into account), money, justice, nationality, marriage, etc.
Åland is not a tax heaven but the Finnish taxes including VAT apply (with some exceptions.)
There is a customs border between Åland and the mainland Finland. Normally, that can be mostly ignored by the travellers. Still, the import regulations apply, because import from Åland to Finland is treated almost similarly to areas outside the EU. (Almost = no duties, as Åland is part of the EU customs union.)
Åland has their own traffic laws, which are derived from the Finnish laws. Thus, very similar. Most of traffic sign and road markings layout is derived from Sweden, but some exceptions apply. The road numbering overlaps with the one used in the Finnish mainland. There are only a handful of numbered roads.
The ferries between Turku and Stockholm make one round on 24 hours. The daytime ferries call at Mariehamn, which is the capital of Åland. As the schelude does not allow two stops in Mariehamn, the night ferries call at Långnäs, which is located close to the main route.
The ferry route from Helsinki to Stockholm is longer, and the ferries make a round in about 40 hours. That allows a call at Mariehamn in both directions, and that happens at night.
The biggest islands are connected by smaller ferries. Rather a complex tariff scheme applies. Two ferry routes have their far end at the Finnish mainland (in Vuosnainen/Kustavi and in Galtby/Korpo). Those smaller ferries are rather crowded during the summer time. The demand is regulated by rather high prices for those non-residents not using the the local accommodation services.
m/s Viking Cinderella at the Turku-Stockholm route
m/s Gudingen at the "southern route" Långnäs-Galtby