The Norwegian government drops its proposal to exclude crypto mining from the general exemption in the tax law for data centres.
District and Digitization Minister Linda Hofstad Helleland comments: “In the revised national budget, we propose to repeal the Storting’s decision to introduce full electricity tax to data centres that operate with cryptocurrency.” She told Norwegian finance newspaper.
Time for change
In 2016, it was announced that data centers would receive reduced electricity tax. The goal was to make norway an attractive place for these sort of activities.
The proposal meant that the data centres should be treated as a power intensive industry. While regular customers pay a fee of 16.13 øre per kilowatt hour for the supply of power, the industry pays a reduced rate of 0.505 øre per kilowatt hour.
Yet, in 2018 it was said that data centers that work with blockchain or crypto technology would still have to pay this tax. The government now believes that this could send wrong signals to the industry about norwegian framework conditions.
Abelia and ICT Norway have given clear signals that imposing different fees on different data centers would weaken Norway’s ability to attract investment in data centers. Statkraft also felt that it would be difficult to enforce the proposal.
Very happy with decision
The NHO Association Abelia is pleased that the government is now dropping full electricity tax for crypto data centers.
“In the emergence of a green data center industry, the parliamentary decision on the maintenance of electricity tax in data centers that also extract cryptocurrency has been an obstacle to predictability and growth also for players other than those who extract cryptocurrency,” says CEO Øystein Eriksen Søreide in Abelia.
Backlash
In 2018, a number of centres had plans to ‘mine” cryptocurrencies such as bitcoin. Such recovery takes place through advanced calculation operations.
“I think it is pointless to spend millions on sponsoring cryptocurrency recovery which is very resource intensive and creates relatively few jobs” Parliament representative Sigbjørn Gjelsvik told a Norwegian newspaper in 2018.