Hive Digital Technologies is challenging the Swedish Tax Agency over a tax ruling that changed how two Swedish subsidiaries are treated for VAT purposes. The dispute could affect how cryptocurrency mining operations are classified across the European Union. It also determines whether the companies can recover VAT paid on major operating expenses.
The legal battle involves Bikupa Datacenter AB and Bikupa Datacenter 2 AB, both Swedish subsidiaries of Hive. Sweden’s tax authority determined that the companies mined cryptocurrency on their own behalf rather than providing taxable services to customers.
That distinction carries major financial consequences. Hive argues that its subsidiaries supplied computing power to identified customers under contracts. The company compares those activities with conventional data center hosting services.
Under European Union VAT rules, businesses can generally recover input VAT when they use purchases to provide taxable goods or services. Activities outside the VAT system may not carry the same recovery rights.
That difference matters for mining businesses because hardware, electricity and cooling account for large portions of operating costs. Dentons, which represents Hive, said the classification therefore has a substantial financial impact on data center operators.
Swedish authorities changed their approach to cryptocurrency mining activities and applied the revised interpretation retroactively from 2022. As a result, affected companies may have to repay VAT refunds that authorities had previously granted.
Hive rejects the view that its Swedish subsidiaries conducted mining solely for themselves. Instead, it says the companies supplied computing capacity to contracted customers who used that power for digital asset mining.
The question sits at the center of Hive’s legal challenge because different classifications can produce different VAT outcomes under European rules.
Hive now wants to take its complaint to the European Commission after Swedish courts declined to refer the issue to the Court of Justice of the European Union.
The company also alleges that Swedish courts failed to explain why they refused to request guidance from the CJEU. Hive says such refusals have become systemic in Swedish tax litigation.
Dentons argues that authorities need to examine mining-related business models in greater detail. According to Hive’s position, the activity can involve several separate elements rather than one mining operation.
Those elements include supplying computing power to an identifiable customer and allowing that customer to use the capacity for mining digital assets. Other related services can also form part of the arrangement.
The European Commission could decide whether to examine the complaint further. It could also close the matter without taking additional action.
Any further review could matter beyond Hive because similar businesses may face disputes over whether they operate as miners, hosting providers or computing-service companies.
Meanwhile, Bitcoin exchange flows showed large withdrawals from several major trading platforms. CryptoQuant contributor Darkfost reported more than 13,800 BTC in net withdrawals from Binance during one day.
That represented Binance’s largest daily net outflow since 2023, according to the data cited by Darkfost. Recent Binance netflows had averaged around negative 2,000 BTC per week.
Binance’s Bitcoin holdings also fell from about 705,000 BTC to 685,000 BTC within four days. Darkfost interpreted the withdrawals as possible accumulation as coins moved away from the exchange.
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Still, exchange withdrawals do not prove long-term holding or guarantee higher Bitcoin prices. Users can move assets for private custody, collateral arrangements, over-the-counter transactions or other purposes.
CryptoQuant contributor Amr Taha reported similar activity across Binance, Coinbase, Kraken and Bitfinex between September 22 and September 24. Combined negative netflows reached about $2.52 billion over those three days.
The reported withdrawals reached roughly $1.57 billion on September 22. They totaled about $438 million the next day and another $511 million on September 24.
Those withdrawals continued while Bitcoin declined from approximately $87,400 toward $84,000. The flow data therefore showed substantial movement away from exchanges even as the market price weakened.
Hive’s dispute with Sweden centers on whether its subsidiaries mine Bitcoin directly or provide taxable computing services. The classification affects VAT recovery on major expenses. Meanwhile, large Bitcoin withdrawals continued across major exchanges as the asset retreated toward $84,000.