The grey economy
Clarifications concerning the contractor’s obligation to check
Clarifications concerning the contractor’s obligation to check - Alasivu
Before signing any agreements, the contractor must obtain the following clarifications concerning the contractor’s obligation to check on companies hiring temporary agency workers and on the subcontractors concerned. At the time of entering into the contract, the information and documentation obtained must not be more than three months old. The contractor needs to retain the clarifications and reports for at least two years after the work concerned has been completed. The contractor has the right to accept the reports obtained from a private service provider who is considered reliable as the clarifications concerning the contractor’s obligation to check, and the obligation to retain clarifications also applies to reports.
The clarifications concerning the contractor’s obligation to check include:
- Documentation on whether the contracting partner is entered in the Prepayment Register and Employer Register, and registered as VAT-liable in the Value Added Tax Register
The report can be printed out from the Finnish Business Information System (YTJ). In addition to the information from the register, the contractor should pay attention to any interruptions in registration which could indicate, for example, that operations have been suspended or there has been problems in complying with obligations.
- Extract from the Trade Register or a document with comparable content
The information can be obtained by ordering it from the Finnish Patent and Registration Office or by using the online service (Virre).
The extract from the Trade Register must be used for checking the information of the person in charge and for ensuring that this person is not subject to a ban on business operations.
- Report on tax payment status
The report can be obtained from the tax debt register via the Finnish Business Information System. Alternatively, the contracting partner can obtain the report on tax payment status or a tax debt certificate from the Tax Administration and send this to the contractor.
The tax debt register indicates whether a company has tax debt at a minimum of EUR 10,000. The tax debt register will now show the exact amount of tax debt in euros. If a company has a valid payment arrangement with the Tax Administration, the company’s tax liability will not be entered in the tax debt register even if it exceeds EUR 10,000. A printout from the tax debt register is a sufficient clarification when the register data indicates that the contracting partner does not have any tax debt recorded in the register.
If the tax debt register or the report obtained from a private service provider indicates that the partner has tax debt at a minimum of EUR 10,000, the contractor must request the contracting partner to provide a tax debt certificate and check the exact amount of tax debt from this document.
The contractor must always evaluate in good faith whether partners intend to honour their statutory liabilities. If a partners´s tax debt can be considered significant and if it is considered that the contractor must have known that the partner did not intend to honour their statutory liabilities, an increased negligence fee may be imposed on the contractor.
If the contracting partner is not within the sphere of the tax debt register (for example, the company is a foreign association without a Finnish branch), the contractor must request the contracting partner to provide a report on its tax payment status.
- Certificates of pension insurance taken out and of pension insurance premiums paid, or an account that a payment agreement on outstanding pension insurance premiums has been made
The contracting partner can order a certificate from their own pension insurance company. The certificate must indicate whether the pension insurance premiums have been paid. A certificate stating that the pension insurance is valid is not sufficient.
If the certificate indicates that there are unpaid pension insurance premiums for which a payment plan has been drafted, the report can be accepted. If no payment plan has been made for the overdue insurance premiums, the report is not acceptable.
There is no obligation to check the pension insurance cover of an entrepreneur.
- An account of the collective agreement or the principal terms of employment applicable to the work
A notification provided by the contracting partner on what terms and conditions of employment are applicable in the employees’ employment relationships. The account must be dated, so that it can be established when the contractor has obtained the information. In addition, accounts provided by a contracting partner must be provided in a binding manner to the partner, i.e., approved with a signature.
- Account on the provision of occupational health care services
A notification provided by the contracting partner indicating the following information: an account on the provision of statutory occupational health care services and the location where such services are provided. Also a copy of the occupational health care agreement or a certificate provided by the provider of occupational health care services on the validity of the occupational health care agreement are acceptable clarifications. The account must be dated, so that it can be established when the contractor has obtained the information. In addition, accounts provided by a contracting partner must be provided in a binding manner to the partner, i.e., approved with a signature.
If the contracting partner does not yet have an obligation to provide occupational health care services at the time when the contract is concluded, the contracting partner can provide a written, signed and dated account of where the occupational health care services will be provided, once the employees begin their work.
A foreign company must provide occupational health care services for their posted workers in Finland.
- Certificate indicating that insurance has been taken out pursuant to the Finnish Workers’ Compensation Act
The contracting partner can order a certificate from their own insurance company. The certificate is required in contracts related to construction work.
If the contractor’s subcontractor or the contracting partner providing temporary agency workers is a foreign company, the contractor must obtain the clarifications indicated above and, when signing the contract, fulfil their obligation to check, i.e. require in writing that the contracting partner submit reports on pension insurance and accident insurance cover for posted workers for the duration of the agreement period before those workers begin work in Finland.
In obtaining the clarifications concerning the contractor’s obligation to check, contractors may become privy to confidential information concerning partners. A contractor or any employee of the contractor may not disclose such information to any third parties.
A person obtaining confidential information may not disclose it to third parties even after that person is no longer in the position in which he/she obtained that information. Confidential information includes, for example, information regarding the payment of taxes, pension insurance cover and accident insurance cover.