All subcontractors are required to join the Vastuugroup.fi service
Contractor’s Liability Act
YIT Corporation requires that all of its Finnish and Estonian subcontractors join the Reliable Partner service maintained by Vastuu Group Oy as we do not engage in any business with subcontractors who have not joined the service.
This requirement applies to the entire contracting chain and all subcontractors working on our sites.
NOTE! All subcontractors are also required to include an account of their business liability insurance in the Reliable Partner report provided by the Vastuu group service. The sum insured and the deductible will be agreed upon on a case-by-case basis, the sum insured, however, being no less than EUR 1,000,000 and the deductible no more than EUR 1,500.
The aforementioned requirements are not applicable to material suppliers.
Vastuu Group Oy
Vastuugroup.fi is a register of information required under the Contractor's Liability Act aimed at companies.
Log in to the Vastuugroup.fi service
The Reliable Partner service retrieves the information required under the Contractor's Liability Act from different registers on behalf of the supplier and the subcontractor and keeps the information up-to-date at all times. The contractor’s obligations and liability when work is contracted out are defined in the Contractor's Liability Act (1233/2006).
The Valvoja service updates a new Reliable Partner report automatically whenever any changes occur in the supplier’s information. The report history updates automatically starting from the date when the addition was made and can be viewed later on in connection with audits, etc. This means that the information need not be checked manually as all details can be found in electronic format, as long as the company concerned was added to the Valvoja service before the contract was signed.
Combating the grey economy – replacement of a subcontractor in a subcontracting chain
Chaining of a contract refers to a case where a subcontractor who is in a contractual relationship with the contractor (YIT) further contracts out the contract, in whole or in part, as a subcontract to another subcontractor. At YIT, such chaining is always subject to permission.
Chaining is often perceived as one of the characteristics of the grey economy, and in YIT’s experience, the subcontracting chain is where the largest problems emerge. The longer the chain, the larger the problems. Chaining is not entirely prohibited, however, but it must be duly justified and carried out in a controlled manner. Special competence may well be chained, for example, whereas the chaining of the same purchase entity without any added value is in most cases ill-founded.
Mid-term replacement of a foreign subcontractor in a subcontracting chain
A relatively new phenomenon is that a subcontractor in a chain of subcontracting agreements concluded with foreign companies, usually a company posting workers, is replaced by another company just prior to the expiry of the presumed deadline stipulated by the tax treaty between the countries concerned. The purpose of this is usually to avoid the formation of a permanent establishment in Finland, although the content of the contract remains the same or nearly the same even after the subcontractor has been replaced.
The tax authorities hold that a foreign contractor has a permanent establishment and, consequently, liability to pay taxes in Finland if the construction operations carried out in Finland last for more than 6 or 12 months. The required number of months varies by the tax treaty (country) concerned. For example, under the tax treaty between Finland and Estonia, any construction site that lasts longer than 6 months gives rise to a permanent establishment.
Finland has concluded a tax treaty with about 70 states. A time limit of 6 months has been agreed upon with countries such as Greece, Turkey and Estonia. With Spain, Ireland, Portugal, Poland, Slovakia, the Czech Republic, Hungary and all Nordic countries, a time limit of 12 months has been agreed upon. The tax treaty time limits must always be checked on a case-by-case basis.
In accordance with the principles of combating the grey economy and the spirit of the law, YIT has decided not to allow any mid-term replacement of a foreign subcontractor in a subcontracting chain without a duly justified reason. This must be clearly stated in contract negotiations as well.
For further information, please contact Juhani Nurmi, Development Manager, Corporate Responsibility in Procurement. (email@example.com)