Global companies, such as Google, Apple, IKEA and Facebook, etc., have a goal to become 100% based on renewable energy in all their operations, and have started to act accordingly. Google elected to purchase the whole power production of the Tellenes wind farm at Sokndal, and sceptical voices are worried about declining tax revenue for Norway.
When a foreign company buys a product in Norway, it doesn’t have to pay tax – it has to pay VAT. Thus, the Google purchase generates tax revenue.
Foreign purchase of electric power is profitable for Norway
When Google decided to purchase the entire output of electric power
from the Tellenes wind farm for 12 years onwards, it laid the foundation for
renewed employment opportunities for unemployed workers laid off from the
Titania mine. The same applied to many of the construction workers employed by
Stangeland Maskin, the contractor, with ABB, the electric systems provider,
with windmill supplier Siemens, and with many other local and regional vendors.
In turn, the construction workers and operational personnel will be paid wages,
and will pay the taxes thereon in Norway.
Google pays for the electric power + 25% VAT. This income was what BlackRock, the world's largest asset manager, based its decision on when it took the risk and invested in the construction of the wind farm, and became a shareholder and owner of Tellenes Vindpark AS, a Norwegian company.
Furthermore, this resulted in Norwegian and international banks becoming willing to provide loans for the development, which in turn resulted in jobs for local businesses and industry, which have to pay tax to Norway in the normal manner.
The host municipalities of Sokndal and Lund will receive annual property taxes to the tune of NOK 10-12 million every year, and Tellenes Vindpark AS will also have to pay corporate income tax, just like other companies. Furthermore, if the owners later decide to take dividends, they have to pay a dividend tax (approximately 30%) to the Norwegian government.
Thus, it is wrong to argue that foreign companies investing in Norwegian wind power do not generate tax revenue for Norway. If the alternative is that nothing at all is invested in renewable energy, because Norwegian funds are not allowed, by the authorities, to invest in this sector, it means no new jobs and no tax.
