Sweden's Tax Crackdown Forces Crypto Miners to Convert to AI-Cloud Services

Sweden's tax authorities are cracking down on data center operators in the country's north, challenging hundreds of millions of kronor in VAT deductions claimed by companies like Northern Data AG and HIVE Digital.

The Swedish Tax Agency has issued proposed VAT decisions against subsidiaries of Northern Data AG and secured appellate rulings against two Swedish units of HIVE Digital (NASDAQ: HIVE).

Northern Data's shift from cryptocurrency mining to AI-cloud and data center operator is being driven by tax disputes, the company said. The region attracted data centers with hydropower, cool temperatures, and reduced electricity taxes.

The Swedish Tax Agency guidance says crypto mining does not constitute a service supplied for payment because there is no identifiable counterparty to proof-of-work blockchain reward. The agency applies similar reasoning to transaction-verification fees when the payer and verifier cannot identify one another.