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Finland plans energy tax cut for data centers

Finland plans energy tax cut for data centers

Finland is likely to further strengthen its competitiveness as a location for large data center projects by lowering its energy tax rate in the near future. The tax cut is included in the program of Finland’s recently elected government and is part of a broader tax reform package for industry that will be debated by parliament next year. The new energy tax rate for data centers is likely to come into force in 2021.

In Sweden, the energy tax rate for data centers was set to the minimum level allowed by the EU in 2017. According to Antti Laine, chairman of the Finnish Data Center Forum, the plan to lower the energy tax rate is positive news for Finland and would help to attract data center investments of the same magnitude as in Sweden and Denmark.

“Finland and Sweden are very similar societies in many ways, so the energy tax rate carries some weight. Of course, the energy tax is not the only factor that influences an investment decision, but it is an important factor when there is little difference between the other variables. For a large-scale data center, we are talking about a tax benefit worth millions of euros per year,” Laine explains.

Finland’s energy tax reform would also boost Nordic cooperation.

“Even taken together, the Nordic countries represent a relatively small market when seen in the global context of the data center industry. Nordic cooperation is required for us to remain competitive as a region. We are constantly building this collaboration, which will become easier when the competitive situation becomes more equal in terms of taxation,” says Laine.