Sweden: Cryptocurrency mining eligible for energy tax relief (court decision)

A case concerning whether cryptocurrency mining was eligible for energy tax relief

A case concerning whether cryptocurrency mining was eligible for energy tax relief

The Supreme Administrative Court (Högsta förvaltningsdomstolen—HFD) held that a company that acquired a property for the purpose of conducting a cryptocurrency extraction business (that is, cryptocurrency mining) is eligible for the reduced energy tax on electricity.

Sweden’s energy tax law provides for a reduced energy tax, in the form of deductions or a tax refund, for certain entities (such as social media enterprises) that consume electricity in a “computer hall” (datorhall).  However, the relief is only available when the consumption takes place at a facility that meets the law’s definition of the term “computer hall”—defined as a facility used by a trader that mainly conducts information service activities, information processing or rental of server space and associated services. The rules also presuppose that the facility’s total installed power is at least 0.1 megawatts, excluding the electric power for fan and cooling systems.

The court held that a facility operated by a company that is exclusively engaged in the sale and mining of cryptocurrency is a computer hall within the meaning of the law and therefore is eligible for the reduced energy tax. According to the HFD, the key issue is that the business is involved in information processing, and the court concluded that the mining of cryptocurrency can be considered to be covered by the term “information processing.”

Read a February 2022 report (Swedish) prepared by the KPMG member firm in Sweden

 

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