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Sweden: Reduced property tax on wind turbines, state aid issue

Sweden: Property tax on wind turbines, state aid issue

The Supreme Administrative Court (Högsta förvaltningsdomstolen) held that the EU state aid rules prohibit Sweden from providing a reduced rate of property tax for wind turbines.


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In general, EU law provides that any state aid that distorts or threatens to distort competition by favoring certain undertakings or production is incompatible with the internal market if it affects trade among EU Member States. A reduction of a tax rate may be such state aid. However, in some instance, state aid support may be allowed. If the total aid to a company does not exceed €200,000 over a period of three tax years, the aid is generally considered to be of minor importance and can be allowed. Support of minor importance is also an exception to the requirement that the EU Member State provide notification of the state aid to the European Commission.

In this case, at issue was whether the property tax imposed on wind turbines (at a special rate of 0.2% of the tax assessment value) was allowable state aid. The standard property tax rate was 0.5% of the assessment value. The lower courts found that the reduced property tax rate on wind turbines did not constitute illegal state aid, and thus allowed the 0.2% property tax rate.

The Supreme Administrative Court, however, disagreed with the conclusions of the lower courts and held that the property tax on wind turbines must be levied at a rate of 0.5% of the tax assessment value. The appeal, thus, was decided in the favor of the Swedish tax agency.

Read an April 2019 report (Swedish) prepared by the KPMG member firm in Sweden

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