Swedish Tax Authorities Seek $90M from Crypto Miners for Unpaid Dues

Swedish tax regulators demand $90 million from companies mining cryptocurrencies in the country for unpaid dues. According to a recent announcement, the country’s tax agency, Skatteverket, uncovered significant tax evasion in the nation’s crypto mining sector during an investigation and is now demanding that the companies pay what is owed to the government.

Misleading Information

Skatteverket investigated 21 crypto mining firms between 2020 and 2023. These firms claim to be operating data centers to avoid paying taxes. During this period, the tax agency found that 18 of the companies had provided misleading or incomplete information regarding the full scale of their business operations.

As per the announcement, this misleading information included falsifying business descriptions to avoid paying value-added tax (VAT) on taxable operations and finding ways to evade import taxes on mining equipment and income tax on mining revenue.

“There is an incentive for unscrupulous actors to conceal their cryptocurrency mining operations and instead claim that they are conducting VAT-liable business activities. In this way, tax revenues disappear from the country in the form of incorrect payments from the state, unpaid output VAT, and unreported crypto assets,” said Patrik Lillqvist, the intelligence chief at the Swedish tax agency.

Authorities said that these companies received tax benefits on false grounds. As a result, crypto mining firms have been asked to return more than 990 million Swedish krona ($90 million) to the government. The amount includes unpaid total VAT of 932 million krona ($85.4 million) and tax surcharges of approximately 57.9 million krona ($5.3 million).

Crypto Miners Appeal $90M Tax Demand

Following the government’s demand to pay up the unpaid dues, the affected companies appealed against the request in the Swedish administrative court.

However, after reviewing the motions, the court upheld only two of the appeals and rejected the rest. According to the announcement, the $90 million has been adjusted for the verdicts.

The tax agency painted a clear picture of how the affected companies operated to conceal the full scale of their business offerings.

According to the authorities, some firms opened a local office in Sweden and registered the business under the country’s market regulator as a data center without disclosing their intention to mine cryptocurrencies.

The company’s representatives then front other businesses, such as selling computing powers to companies abroad owned by the same firms, while, in reality, they are mining crypto in Sweden. The foreign companies served as camouflage, buying services from the Swedish-based firms to make it appear legit as a true data center.

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