Global Daily Tax News, Estonia Identifies Hundreds Of Errant Construction Firms, (Dec 16, 2024)

Having announced the start of a construction sector probe in October, Estonia's tax agency has reported that dozens of violations have been identified across Estonia at more than 200 employers inspected so far.

Construction companies have been required to register major construction sites, contract chains, and employees authorized for the sites in the MTA e-services environment for a year. The obligation is intended to establish a level playing field in the construction sector, prevent violations, and reduce the tax gap.

According to Lia Parve, head of the tax audit department at the Estonian Tax and Customs Administration, various problems have emerged during inspections across Estonia. The most common problem is a situation where employees are on site, but there is no trace of this in the employment chain and employment duration information system (TTKI), the agency said.

"Sometimes the problem is that some employees enter the facilities from places where they are not registered. There are also facilities where the registration system is located away, not at the gate of the facility, and therefore not all employees have registered," said Lia Parve, head of the MTA's tax audit department.

There have also been some shortcomings due to construction companies failing to take timely steps. "During inspections, situations have emerged where employees have not been issued cards to register with on-site," Parve said. "It has also happened that the work chains registered in the information system are incomplete, meaning not all subcontractors have been entered there. Even if builders register their cards in the system when they go to the site, the correct data is not entered into the MTA information system in this case."