Companies and self-employed workers operating on construction sites/shipyards in Finland must obtain a Finnish Tax Number and an identification card (Valtti card) to be authorised to enter the workplace.
In this article we will analyse the additional obligations for those carrying out activities on these types of workplaces in Finland.
For more details on all the obligations, read our article on posting workers to Finland.
The construction site/shipyards in Finland
In Finland, the categorisation and what is considered a construction site is regulated by the Decree on the Safety of Construction Work 205/2009, section 1 (asetus rakennustyön turvallisuudesta, 205/2009).
In the decree, a construction site can be:
- Works related to new buildings;
- Maintenance or renovation of buildings or other types of structures (including at sea);
- Installation, demolition, civil engineering and building design works;
Furthermore, the decree applies to preparation and planning works in relation to the above-mentioned activities as well.
Section 52c of the Occupational Safety and Health Act defines what a shipyard is.
The shipyard is a shared workplace for:
- repairing or building merchant vessels,
- repairing or building vessels used by public authorities or;
- repairing or building vessels longer than 24 metres.
Section 49 of the same Act clarifies the definition of shared workplace, which is a worksite belonging to a single employer within which there are other companies/self-employed persons carrying out their activities at the same time or successively. This has the potential to affect the health and safety of workers belonging to different companies.
The Finnish Tax Number
In case of transnational provision of services at one of the two types of worksites mentioned, the submission of the declaration of posting, the appointment of a representative on site, holding the A1 Certificate and the compliance with the working, safety and wage conditions on site will not be sufficient to comply with local regulations.
As a matter of fact, the workers must hold an identification document (Valtti Card) and a Finnish Tax Number. This requirement has been introduced specifically to oppose shadow or undeclared work. In addition, it is also fundamental to monitor the personnel on construction/shipyards and tax compliance of workers.
The obligation to register in the Finnish tax registers and possess a Finnish tax number is effective from 01/07/2022. This requirement stems from the Laki veronumerosta ja veronumerorekisteristä of 473/2021. It also standardises the obligation within the Occupational Safety and Health Act.
The Tax Number is a 12-digit code that Finnish citizens receive at birth, together with a Tax ID.
Citizens not resident in Finland, on the other hand, must apply to the Tax Administration to obtain both. The application procedure must be carried out in person by the applicant, who must hand in profiling forms containing:
- Personal information of the applicant,
- Salary information of the applicant,
- Information on work activity in Finland,
- Information about the duration of the activity in Finland.
Tax Administration sends the Tax ID containing the Tax number by e-mail address a few days after the appointment. Timeframes may vary, so it is necessary to make the appointment in advance of the expected start date of the working activity.
The Valtti Card and Posting Notification
Once the employee and/or self-employed person has received the Tax ID (inside which there will also be information about the Tax Number), they must apply for the identification card (Valtti Card) to enter the workplace.
The badge, as per the provisions of Sections 52a and 52c of the Occupational Safety and Health Act, must contain the following information:
- Worker’s full name;
- Photo of the worker;
- Employer’s name (if employee);
- Finnish Tax Number;
- Type of worker (employee or self-employed).
The physical copy Valtti card will be sent to an address provided during the application process. However, a provisional certificate in pdf format will be immediately available.
Once in possession of the document and after completing the notification of transnational provision of service in the Finnish national portal (in which it will also be necessary to enter the employee’s tax number), the worker can enter the premises.
Additional Reporting Obligations
In addition to the obligations described above, the buyer for the construction work must send a monthly report on the work carried out in the workplace (by the 5th of the month following the work for which the notification is sent at latest).
Act on assessment procedures, §15b, §15c, and §15d introduces the reporting obligation on construction sites. The requirement is introduced mainly for tax purposes of those involved and to combat undeclared work.
The buyer the construction work must inform the competent authorities of the service companies in the following cases:
- The subcontracting company has provided a construction service to the buyer (§ 31.3.1 VAT Act),
- The subcontractor has erected or dismantled scaffolding in preparation for construction work, or
- The subcontractor has leased personnel for the above-mentioned types of work.
It is for this reason that the client will report on the activities carried out by its subcontractors.
In the case of a subcontracting chain, on the other hand, each company that has its own subcontractors will have to report on its suppliers’ activity.
Planning and supervision of works are exempt from the reporting obligations, unless they are carried out by the company that is providing other construction services that fall under the same obligation.
The contractor must send the report or contact the Tax Administration directly to provide the following data:
- General information about the subcontractor;
- Information on the construction site;
- Principal’s information and relevant contact person;
- Value in euro of the contract for each monthly report;
- Duration of the contract;
- Category or type of contract/agreement between the parties;
- Applicability or non-applicability of reverse charge for VAT.