Swedish tax authority Identified misconduct It turns out that 18 local business companies were hiding their involvement. cryptocurrency miningIt was written on Wednesday.
The investigation, which ran from 2020 to 2023, focused on data center operations and revealed that the company was intentionally abusing ineligible tax incentives.
Patrick Lillqvist, head of the agency's information division, said the companies' actions constituted an attempt to secure unfair tax benefits. In response, the agency is demanding an additional SEK 990 million ($91 million) in taxes, including value-added tax (VAT) and surcharges.
The report highlighted the difficulties investigators faced in determining the true purpose of data center operations and the identities of those utilizing computing resources. In a significant number of cases, investigators faced the challenge of establishing the nature of the business carried on in these establishments.
Unreported income from cryptocurrency mining in Sweden
Additionally, the report details instances in which crypto mining data centers submitted misleading or incomplete information regarding their business activities.
“Unscrupulous actors have an incentive to hide their crypto mining operations and instead claim to be carrying out business activities that are subject to VAT. Tax revenue will disappear from the country in the form of production value added tax and unreported crypto assets,” Lilqvist added.
Tax authorities further expressed concern about possible money laundering activities. Due to their exemption from money laundering laws, virtual currency mining data centers currently operate outside the scope of regulatory oversight. This lack of oversight increases the risk of illegal financial transactions.
It also said it is difficult to quantify the total amount of cryptocurrencies mined and subsequently sold, including related sales revenue. Therefore, there is a significant risk that unreported sales will result in additional income tax losses for the government.
Companies employ misleading tactics to hide crypto mining
The report said the results of 10 cases were appealed to higher authorities. In eight cases, courts upheld the original findings and dismissed the companies' appeals. The company was partially successful in one appeal, and the court granted the revised judgment.
In one example, Datorhall AB reported its business activities to authorities as consulting services, operating data centers, and developing high-performance computing products. However, the investigation revealed that Datorhall had a unique clientele: a foreign company with related parties. Notably, Datorhall's computing infrastructure consisted solely of equipment dedicated to cryptocurrency mining.
Another company, Datacenter AB, reported that its business activities include the sale of computing power for graphic design and artificial intelligence applications. However, tax authorities obtained web browsing history and chat messages from representatives of various companies. This analysis revealed significant discrepancies. 93% of his online searches for the company were related to cryptocurrency mining, and less than 1% of his searches were clearly related to the creation of graphic films.
In one chat message, a representative from Datacenter AB wrote: “You can never control how a computer is used, so you can ban it all you want, but it won't make any difference.”
A few days later, another rep wrote: We are a data center with operations and computers that our customers use for graphic film and artificial intelligence. ”
Sweden's central bank chief cautious about Bitcoin integration
Last month, the Governor of Sweden's central bank expressed concern that: Extensive Bitcoin integration Affects a country's financial system. Their concerns arose from Bitcoin's speculative nature and the potential for significant losses for investors.
