New ruling on property tax for wind turbines

The Supreme Administrative Court has recently issued a ruling which affects the property tax for wind turbines in Sweden.

The ruling was announced on April 16 2019 in case no. 3873-18, and means that all power generating units that represent taxation units shall be taxed at a rate of 0.5% in the event that a lower tax rate exceeds the ceiling amount for de minimis aid.

The grounds for the Court's ruling are in brief that a reduction of tax can constitute a form of state aid, which is prohibited under EU law. However, if the total aid to a company does not exceed a ceiling of EUR 200,000 over a period of three taxation years, it may be considered to be a support of minor importance and thus be allowed.

According to the Act on National Real Estate Tax (1984: 1052), property tax is calculated at 0.5% of the taxable value for power generating units, with the exception of taxation units such as wind turbines where the tax rate is instead 0.2%. According to the new ruling of the Supreme Administrative Court, the higher tax rate of 0.5% shall be levied if the lower tax rate of 0.2% exceeds the ceiling amount for support of minor importance. The lower tax rate may thus be applied as long as the ceiling of EUR 200 000 is not exceeded.

The ceiling amount shall be calculated at group level, which means that the economic effect of the lower tax rate for several companies within the same group shall be aggregated to determine if the ceiling amount is exceeded. This is not expressly stated in the ruling, but follows from the fact that companies within the same group are to be considered as a single company within the meaning of the Commission Regulation (1407/2013) on de minimis aid.