Government Delays Tax Support for Data Centers as Electricity Tax Increases
The Finnish government’s planned tax support for data centers will not take effect from the beginning of July as previously scheduled, though the project has not been abandoned entirely. According to government sources cited by MTV Uutiset, preparations for the support continue, but progress remains uncertain.
The Economic Policy Committee initially outlined the tax support last autumn, with an intended start date of 1 July, coinciding with the expiration of the previous electricity tax relief for data centers. The Ministry of Finance has been drafting the legislative proposal, while the Ministry of Employment and the Economy has been preparing a registration obligation for data centers. However, MTV Uutiset reports that the process has stalled, with no political decision made on how to proceed.
Leo Parkkonen, Legislative Counsel at the Ministry of Finance, described the situation as being in a "standstill," stating that civil servants have not received clear guidance on whether to advance or abandon the support. He emphasized the need for a decision to provide clarity for both industry operators and officials.
Electricity Tax Increase Takes Effect
While the tax support remains unresolved, data centers have already faced a significant increase in electricity taxation. From 1 July, the electricity tax for data centers rose from the lower class II (€0.0005 per kWh) to the higher class I (€0.0224 per kWh), a change welcomed by Minister of Finance Riikka Purra (Finns Party).
In a post on X, Purra stated that the tax increase was "exceptionally pleasing," explaining that the difference between tax classes constitutes state aid. She maintained that Finland’s key advantages for data center investments—such as affordable and clean electricity, a stable power grid, and opportunities to utilize waste heat—remain intact.
The tax hike has drawn criticism, though some experts argue that tax incentives are no longer necessary to attract data center investments. Jukka Ruusunen, Industry Professor at LUT University, told Ilta-Sanomat that a fast electricity grid connection is now a more critical factor for investors than subsidies.
Growing Electricity Demand and Future Plans
Data centers’ electricity consumption is projected to reach 5–6 terawatt-hours by 2030, accounting for 3–4% of Finland’s total electricity use (Ilta-Sanomat). To address this, over 100 members of parliament have backed an initiative by Heikki Vestman (National Coalition Party) requiring data centers to cover their own electricity consumption by either building or purchasing new power production in Finland.
The government’s next steps on the tax support remain unclear, with its progress reportedly tied to the registration obligation still being prepared by the Ministry of Employment and the Economy.
