Swedish Miners Face $90 Million Tax Claims

The Swedish tax authority, Skatteverket, has identified a tax shortfall from mining companies amounting to nearly 1 billion kronor (over $90 million).

An investigation conducted from 2020 to 2023 revealed violations in 18 out of 21 examined companies in the sector.

“The companies we examined used a specific approach to conceal their involvement in mining, which is the creation of new cryptocurrency units. Their aim was to obtain tax benefits to which they are not entitled,” explained Skatteverket’s head of intelligence, Patrik Lillkvist.

Most of the identified violations involve the improper avoidance of value-added tax (VAT) by data center operators. The additional amount assessed was 932 million kronor, with another 58 million kronor related to general fiscal payments.

“Dishonest entities are incentivized to hide their cryptocurrency mining activities and instead claim they are conducting VAT-exempt business. This results in a loss of tax revenue for the country,” the official explained.

According to him, there are also money laundering risks associated with miners, as data centers are not subject to the relevant legislation.

According to MinerMetrics, Sweden accounts for about 0.8% of the global Bitcoin hash rate.

In 2021, Swedish financial and environmental regulators called for a ban on Bitcoin and other cryptocurrencies mining using the Proof-of-Work algorithm in the European Union. The initiative found support in neighboring Norway (1.5% of the digital gold network’s computing power).

In April 2024, the Norwegian government confirmed its intention to end digital asset mining in the country as an undesirable activity.