April 18, 2024 — Swedish crypto miners are now liable for over $90 million in unpaid taxes following extensive government investigations that exposed financial misconduct over four years. The Swedish Tax Agency, Skatteverket, conducted detailed investigations into 21 crypto-mining firms from 2020 to 2023, finding that 18 of these firms had engaged in deceptive practices to exploit tax incentives.
The investigations targeted a range of crypto-mining companies operating within Sweden, scrutinizing their compliance with tax obligations. The primary offenders included companies that deliberately misreported their business activities to gain tax advantages improperly.
The Skatteverket’s probe revealed that several crypto-mining firms avoided paying value-added tax (VAT), import taxes on mining equipment, and income tax on the revenue generated from mining activities. This resulted in substantial tax evasion, amounting to a combined demand of approximately 990 million Swedish krona ($90 million) from the investigated firms.
The investigations covered a period from 2020 to 2023, with the findings and tax demands concluding recently. Some companies have appealed the tax assessments, with the administrative court upholding the appeals of two firms and rejecting the rest.
The operations and investigations span across Sweden, highlighting issues within the country’s burgeoning crypto-mining industry, known for its significant energy consumption and potential tax revenues.
The deceptive practices by crypto-mining firms were primarily aimed at minimizing tax liabilities illegally. A statement from the Skatteverket articulated the impact: “The described approach leads to tax disappearing from the country in the form of incorrect payments of input VAT, unpaid output VAT, and unreported crypto assets.”
The tax authority meticulously analyzed business reports, financial statements, and operational data from these firms to uncover the discrepancies. The total tax recovery includes unpaid VAT totaling 932 million krona ($85.4 million) and additional tax surcharges of about 57.9 million krona ($5.3 million).
In related developments, Hive Digital Technologies, a notable player in the industry, recently expanded its operations by acquiring a new data center in Boden, Sweden, in November 2023. This move is part of Hive’s ongoing commitment to environmental sustainability and energy-efficient ‘green’ crypto mining, which contrasts sharply with the non-compliant practices uncovered in the broader industry. Hive’s initiative highlights a growing trend toward responsible and transparent crypto-mining practices in the region.
