The answer is, "NO", but it happens sometimes. It depends on what you're doing, where you are, and which service you use. Many users have the misconception that using a VPN to hide your IP address online makes you invincible to the law. VPN services use keywords and phrases that imply this, but it's not always true. Though VPN services "hide your identity online", "protect you from government and private organizations tracking your IP address", 'unblock websites blocked by country firewalls", "don't keep server logs", among other things, there are some conditions.

For example in September 2011, it was discovered that a hacker group by the name "LulzSec" hacked into some major corporations and government agencies, including Sony, The UK Serious Organized Crime Agency, NATO, AT&T, Viacom, Disney, EMI, NBC Universal, and AOL. They then released private and sensitive information from all of the above organizations for public access. It was soon discovered that they used Hide My Ass, a British VPN company. Upon court order, HMA was able to provide login details of LulzSec, the hackers were identified, and taken to court. Though the official charges, the number of hackers related to the incident, and whether all of them used HMA's service is unclear, the point stands that HMA released information about one of its users. Why?

Because what they where doing was illegal according to British Law. As a UK company, they are bound by the laws of The UK, and if they don't comply with these laws, regardless of what they're about, HMA could be shut down. Not only HMA, but this could happen to any other legitimate VPN service. Furthermore, HMA has clearly stated that they do not fear the government of any country, and this was necessary to continue providing service to other non-law-breaking users.

Could the same happen to you? It depends on what you do. For example, if you're in China, and access Facebook, which is a banned website - a VPN service most definitely won't give away your information to the Chinese government - we saw the revolution in Egypt earlier this year fueled by Twitter and Facebook (they're both banned in Egypt). If you're downloading torrents with a Dutch IP from your VPN service, you're also safe. Torrents and file sharing are legal in The Netherlands, so you're safe.

So how can you be sure?

I'm no lawyer, but as far as what I've seen written in blogs, forums, and articles online, unless you're into some serious hacking and want to hide your IP address to wreak havoc, I think you're alright. Even regarding the gray area of file sharing in countries like The US and The UK, unless you've got 10 thousand gigs of copyrighted material on you're hard drive, you haven't got much to worry about. It's best to be clear on local laws, and laws of the IP addresses you're using over the VPN network, but unless you're invading and exposing information of other users, I don't think anyone's going to bother you..