France became the latest country to implement tax breaks on data centers; an incentive that halves taxes on energy usage for companies having data centers,
Mohit Prasad, Power Analyst at GlobalData, a leading data and analytics company, offers his view on the impact of this decision:
“This would make France a more attractive investment destination for data center companies taking into account the current scenario on Brexit. The country has reported to cut TICFE* from €22.5/MWh to €12/MWh.
“The increasing focus on data privacy and security is boosting the growth of data centers globally. In the UK, the Internet economy contributes around 10% to the UK’s GDP. In order to grow the data centers business, the country implemented reduction in energy related taxes for data centers through the Climate Change Agreement. The scheme reduces the colocation data center energy costs by around 10% – around 1.5 pence/kWh – in exchange for requiring facilities to reduce energy usage by the sector as a whole so that overall emissions go down.
“Data center companies, especially in Europe, are checking for new developments on Brexit and GDPR, which will drive their investment decisions. Post-Brexit, these companies would have to set up data centers in countries which are part of the EU and countries such as France, which have now implemented the tax break for these companies, might be one of the attractive destinations in the future.”
*TICFE: Taxe intérieure sur la consommation finale d’électricité