The Finnish Tax Administration wants to ensure that the taxation of the companies and employees participating in the construction of Hanhikivi 1 will run according to plan. A smooth transition is important, because no one can enter the construction site without a tax identification number.
The Finnish Tax Administration and Fennovoima are working in close cooperation to ensure that everything at the Hanhikivi 1 construction site is compliant with Finnish regulations. The Tax Administration has stepped in to make sure that their services conform to the needs of the exceptionally large construction project and that non-Finnish companies and employees receive information on the Finnish taxation process in due time.
Naturally, the cash flow from the nuclear power plant project, which will cost six or seven billion euros, also means plenty of tax revenue.
- Our goal is to collect the taxes from this cash flow at the right time and in the right amounts, and to allocate the tax revenue to the correct countries, says project manager Jarmo Lahdenperä from the Northern Finland Tax Auditing Unit.
Lahdenperä estimates that up to 4,000 employees may be simultaneously working at the construction site. This means that the processes of the Tax Administration must be up to speed.
- For example, all non-Finnish employees must be provided a Finnish social security number and a tax identification number to be able to enter the construction site. If the registration process is not clear-cut, the companies as well as the Tax Administration will pay for any delays.
Tax Administration comes to construction site
The transparency of the Tax Administration processes will be fine-tuned when experts come to the nuclear power plant construction site for a Hanhikivi taxation project that will end in late 2018. The purpose of the project is to ensure that all taxation services are met by the construction site.
Foreign companies will receive information about the tax practices as soon as possible. Cooperation with the taxation authorities of other countries will take place in taxation control to ensure that all non-Finnish companies and employees are taxed by the correct country.
- According to Finnish legislation, the right of taxation starts very quickly. For example, agency workers from specific countries will have to pay their taxes in Finland starting from the very first pay slip, says Lahdenperä.
Lahdenperä points out that the Tax Administration and Fennovoima have been cooperating since 2011. Furthermore, a notification obligation on the use of construction services that entered into force in 2014 has allowed the Tax Administration and customers who order construction projects to battle the gray economy in the entire country.
- The construction site register of the Hanhikivi 1 project is a good example of how tight control of a construction site will also benefit taxation. As trade secrets and other information subject to strict data protection requirements are processed at the construction site, the employee registers are in good condition, which also serves the interests of the Tax Administration.
Working culture develops
Lahdenperä points out that it is ultimately a question of a healthy working culture where all duties are properly handled. Commitment to occupational health and safety means that other obligations are also handled in a timely manner.
The goal of all the activities at the construction site is zero accidents, and the same thinking can be applied to taxation: when you take care of your tax issues, you can get a good night’s sleep.
In the future, Tax Administration officials will be available at a pop-up service point in the Fennovoima training building. The facilities for the Tax Administration and other authorities have already been built.
The project also involves a development viewpoint: the Tax Administration is continuously developing its digital tools.
- We continuously analyze the data we collect, and if there are many registration errors, we can improve the registration instructions and provide more counselling.
Cornerstones of Tax Administration service development
- Proactive control makes sure that the customers are aware of the necessary taxation issues at the right time.
- The construction site register of the Hanhikivi 1 construction site includes complete information about all the employees and companies working at the construction site. Registration is a prerequisite for working at the construction site.
- The Tax Administration wants to make registration of non-Finnish parties especially straightforward. When all the employees and companies working at the construction site are included in the correct Tax Administration registers, taxation will be easy to handle.
- Taxation control will take place in close cooperation with the taxation authorities of several countries in the Hanhikivi taxation project.