Attracting Multinational Tech-companies through Environmental Tax Incentives

Yvette Lind*

*Corresponding author for this work

Research output: Contribution to conferencePaperResearchpeer-review


In this contribution, Sweden´s favourable tax regime which awards a significantly reduced electricity tax rate to data centres is examined. The findings of the paper are applicable to other jurisdictions, such as Denmark and Finland, as they are subject to similar conditions. Data centres are, when subject to the tax regime, subject to less than 2% of the normal electricity tax tariff. Multinational tech-giants benefit heavily from it while many domestic companies (colocation centres) are excluded due to its technical design and attached administrative case law. Initial calculations indicate there is tax savings of more than SEK 500 million (circa Euro 50 million) on an annual basis. Therefore, the tax regime acts as an international tax competition tool through its fiscal state aid function while, at the same time, eroding the tax bases and business life of northern Sweden. It does not initially appear to infringe on EU state aid rules nor the principle of non-discrimination. This Illustrates that there is still some margin of freedom for individual Member States to compete through tax measures. Additionally, tax policy objectives of the tax regime are considered and analysed. In particular, the impact it has had on not only international tax competition but also the economy of local municipalities, local business life, and progressive climate goals. A critical commentary focusing on sustainability is applied throughout the paper.
Original languageEnglish
Publication date2021
Number of pages15
Publication statusPublished - 2021
EventPossibilities and Limits of State Aid Law in the Field of Tax Law - Faculty of Law, Vienna University, Vienna, Austria
Duration: 7 Oct 20217 Oct 2021


ConferencePossibilities and Limits of State Aid Law in the Field of Tax Law
LocationFaculty of Law, Vienna University


  • Multinational enterprises
  • Tech-companies
  • Tax incentives
  • Energy taxation
  • International tax competition

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