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JUHANI ARTTO
HOMEPAGE 2013

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Compulsory taxation ID requirement for construction workers targets the grey economy

Helsinki (05.09.2012 - Juhani Artto) All workers at new construction sites in Finland must now have identification documents containing their personal taxation numbers, under new legislation that came into force on 1 September 2012. Workers at older construction sites must have such ID by 1 March 2013. Foreign workers are not exempted from the new rules.

These novel regulations may become the most powerful weapon available to the Finnish authorities in their struggle against the grey economy. Over the last decade illicit employment practices have spread alarmingly through Finland’s construction sector. This has made it more difficult for honest companies to win tenders, and deprived the authorities of hundreds of millions of euros in unpaid taxes and social security contributions. Both Finnish and foreign companies have been involved in such illegalities.

The revised legislation additionally compels contractors to check that sub-contractors meet their obligations towards their employees.

A statement released by the Finnish taxation and employment authorities emphasized that in future all construction contracts must require building contractors to comply with the minimum employment conditions defined in legislation and collective agreements. These conditions cover fundamental issues including pay, working hours and holidays.

The new rules form part of a wider Finnish Government action plan designed to combat the grey economy. 

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