The Swedish Tax Agency (Skatteverket) has determined that six cryptocurrency mining companies located in Boden, northern Sweden, used special corporate structures to conceal their actual operations, fraudulently obtaining tax benefits intended only for ordinary data processing centers. The agency has ordered these six companies to repay taxes and fines totaling approximately 540 million Swedish Krona (about 56.5 million USD).

The core of the dispute involves two tax arrangements: Sweden previously offered significant discounts on energy tax rates for data centers—0.5 Euro cents per kilowatt-hour before 2021 and 0.6 Euro cents per kilowatt-hour until July 2023, far below the standard rate. Additionally, some companies claimed VAT deductions under the guise of "selling computing power services," while the tax authority determined that Bitcoin mining itself does not have identifiable service recipients and should not be included in the VAT deduction system.

This recovery stems from a comprehensive industry audit conducted by the Swedish Tax Agency from 2024 to 2026, which examined 18 mining companies, 13 of which are located in Boden. Nationwide, nine companies have been ordered to repay a total of over 50 million USD in taxes and fines, with the 540 million Krona from the six Boden companies being the largest amount.

Patrik Lillqvist, head of the intelligence department at the Swedish Tax Agency, stated that the relevant companies "came to this society and are essentially stealing from it," and noted that most of the companies under investigation had specially designed arrangements to conceal their mining activities. The core entity involved, Bikupan Datacenter, and its Swedish regional head Johanna Törnblad denied the allegations, insisting that actual mining is conducted by external pools and that the company merely sells computing power. However, both the Swedish Administrative Court and the Appeals Court have supported the tax authority's findings. Bikupan is currently undergoing financial restructuring, and the case is being appealed to the Swedish Supreme Administrative Court.

Bikupan's parent company, Hive Digital Technologies, is listed on NASDAQ and the Toronto Stock Exchange. After the complete cancellation of tax benefits in July 2023, the electricity costs for mining operations in Sweden reportedly increased by about 0.3 Krona per kilowatt-hour, directly compressing the profit margins for pure mining operations. Meanwhile, Hive and its peer Northern Data have begun transforming their mining facilities in Boden into data centers catering to AI and high-performance computing clients, explicitly linking this transformation to the tax dispute—because renting computing power to AI clients has identifiable charges and can be included in the current VAT framework, avoiding the same qualitative risks faced by mining operations.

Notably, despite being embroiled in tax disputes, Hive has not withdrawn from Boden: the company recently announced the acquisition of a local 32-megawatt data center, deepening its eight-year partnership in the area, and has also signed a 10-year AI computing power leasing agreement with a Swedish "sovereign" client, indicating that the region's electricity and cooling infrastructure still holds strategic value for high-energy computing businesses, although the tax benefits previously enjoyed by mining have disappeared.

Source: Public Information