Iceland: We’ll Fix the Tax Incentives

The government of Iceland says it will take steps to keep the country’s emerging data center industry competitive, responding to concerns that the nation’s tax policies were discouraging potential prospects.  

As we reported yesterday, some legislators in Iceland have balked at eliminating the value-added tax (VAT) on server equipment, a common incentive in many U.S. states and many European locations. There were reports that IBM is reconsidering plans to take space at a Verne Global project, citing the extra expense of paying taxes on servers housed in Iceland.

In a letter to industry leaders, Iceland finance minister Steingrimur Sigfusson said the tax situation would be addressed. “A solution is currently being worked out and will be presented shortly so necessary changes can take effect as soon as possible,” he wrote. “A comparable tax system will enable the Icelandic Data Center industry to enjoy their special competitive advantage.”

Katrin Juliusdottir, minister of industry, energy and tourism, welcomes the announcement. “We remain committed to make sure that our data center industry is fully competitive,” said Juliusdottir.