Swedish Tax Scrutiny Impacts Crypto Miners Shifting to AI

Swedish tax officials have issued proposed VAT decisions against subsidiaries of Northern Data AG and two Swedish units of HIVE Digital. The agency argues that portions of the companies’ activities constitute cryptocurrency mining, which is outside the VAT system, and therefore the input VAT claimed on equipment and services should be denied.

VAT treatment of mining vs. computing services

The Swedish Tax Agency states that crypto mining does not constitute a taxable service because there is no identifiable counter‑party for the proof‑of‑work rewards. Consequently, input VAT on purchases used for mining cannot be deducted. By contrast, the sale of computing capacity to a known customer – such as AI‑cloud services – fits the conventional VAT framework.

Impact on Northern Data

Northern Data’s Swedish subsidiaries – Decentric Europe BV, Hydro66 Svenska AB and Hydro66 Services AB – face proposed denials of input VAT amounting to roughly 300 million kronor (€28 million) and 218 million kronor (€20 million). The company disputes the assessments, arguing that its operations provided infrastructure and services to third‑party customers. A criminal investigation into alleged large‑scale VAT fraud, estimated at over €100 million, was launched in September 2025, leading to arrests but no formal finding to date.

Impact on HIVE Digital

HIVE’s Swedish entities, Bikupa Datacenter AB and Bikupa Datacenter 2 AB, have received decisions rejecting input‑VAT recovery and demanding repayment of earlier refunds. Appeals to the Administrative Court and Court of Appeal were unsuccessful, and the company has applied to the Supreme Administrative Court. HIVE recognized an 822 million‑kronor (€84.7 million) provision for the disputed periods, a non‑cash charge that exceeded its quarterly revenue and contributed to a net loss.

Operational shifts toward AI

Both firms are converting mining facilities to AI‑cloud and high‑performance computing workloads. HIVE is phasing down ASIC‑based mining at its Boden site and repurposing a 7‑megawatt facility for Tier III AI services, with plans for additional conversions. Northern Data’s broader corporate strategy already includes a transition to GPU cloud offerings.

Broader Swedish policy context

Sweden eliminated a reduced electricity‑tax rate for data centres in July 2023, adding roughly 0.30 kronor per kWh to operating costs. A separate EU case challenges Sweden’s 30 % withholding rule on payments to certain foreign contractors, highlighting the broader tax‑collection pressures faced by companies operating in the country.