Tax breaks for data centres announced by French government

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France has become the latest country to implement tax breaks for data centres; an incentive that halves taxes on energy usage for companies having data centres. Commenting on the decision, Mohit Prasad, Power Analyst at GlobalData, a leading data and analytics company, said:

Tax breaks for data centres could make France an attractive destination for investment, particularly in post-Brexit Europe

“This would make France a more attractive investment destination for data centre companies taking into account the current scenario on Brexit. The country has reported to cut TICFE (Taxe intérieure sur la consommation finale d’électricité) from €22.5/MWh to €12/MWh.

“The increasing focus on data privacy and security is boosting the growth of data centres globally. In the UK, the Internet economy contributes around 10% to the UK’s GDP. In order to grow the data centres business, the country implemented reduction in energy related taxes for data centres through the Climate Change Agreement. The scheme reduces the colocation data centre 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 centre 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 centres 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.”

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