Sweden’s tax agency has uncovered irregularities in 18 locally operating companies, revealing their involvement in crypto mining operations that they attempted to conceal to exploit tax incentives. The investigation, spanning from 2020 to 2023, focused on data center operations and found that these companies deliberately exploited tax benefits for which they were ineligible.
Patrik Lillqvist, head of the agency’s intelligence unit, stated that the companies’ actions aimed to gain undue tax advantages, leading the agency to demand an additional 990 million Swedish krona ($91 million) in taxes, including value-added tax (VAT) and surcharges.
The investigation encountered challenges in determining the true purpose of data center operations and the identities of those utilizing the computing resources. Many instances involved difficulties in establishing the nature of the business conducted at these facilities.
The report also highlighted instances where crypto mining data centers provided misleading or incomplete information regarding their business activities, leading to concerns about potential money laundering activities. Due to their exclusion from regulatory oversight, crypto mining data centers operate outside the scope of the Money Laundering Act, raising the risk of illicit financial transactions.
The tax authority expressed concerns about unreported income from crypto mining and its associated sales, leading to potential income tax losses for the government. Several companies employed misleading tactics to hide their crypto mining activities, falsely reporting their business activities to authorities.
In one instance, Datorhall AB falsely reported its activities as consulting services and development of high-performance computing products, while its computing infrastructure was solely dedicated to crypto mining. Similarly, Datacenter AB falsely claimed to sell computing power for graphic design and artificial intelligence, despite evidence revealing its primary focus on crypto mining.
The revelations come amidst the Swedish Central Bank’s cautious approach towards Bitcoin integration into the country’s financial system, citing concerns about its speculative nature and potential investor losses.