Sweden: Proposal to repeal energy tax relief for computer server facilities, tax on waste incineration

Tax proposals to address rising electricity prices, repeal the reduction from the energy tax currently available for “computer halls”

Computer server facilities, tax on waste incineration

The Swedish government is in the process of preparing tax proposals to address rising electricity prices and specifically to repeal the reduction from the energy tax currently available for “computer halls” (datorhallar).

The government also is reported to be considering the repeal of the tax imposed with regard to waste incineration.

Computer server halls, energy tax relief

Since 2017, computer server halls have been able to benefit from a reduced energy tax on electricity consumed in the computer facility. The reduced energy tax on electricity for computer server halls has been made available through deductions or tax refunds, and was introduced in order to attract several players in the digital economy that depend on electricity-intensive server halls in their operations. The tax relief has been limited to computer server facilities with a total installed electric power, excluding fan and cooling systems, of at least 0.1 megawatts.

Given current electricity price trends and concerns about the coming winter, government officials have expressed beliefs that the conditions for the energy tax reduction have changed. The Ministry of Finance is therefore considering a bill that would repeal the energy tax relief available for computer server halls.

According to a press release from the government, the Ministry of Finance's proposal would be made available for consultation. Currently, there are no details about the timetable for the proposal.

KPMG observation

The energy tax on electricity consumed in a computer server hall is currently set at SEK 6 per MWh. If the tax relief were to be repealed, the energy tax would increase to SEK 360 per MWh (SEK 264 per MWh in northern Sweden).

Tax on waste incineration

The Ministry of Finance reportedly is considering a proposal to repeal the tax on waste incineration. Government officials see opportunities for repeal of the tax on waste incineration (that can take place in heating and cogeneration plants) to positively affect the supply of electricity in the longer term.

With reference to an analysis from the Swedish tax agency, the government is considering that the waste incineration tax has not had the intended effects towards resource-efficient and non-toxic waste management. In addition, the tax is deemed to have had negative economic effects for the industry.

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


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