Construction reporting and the disclosure obligation: what everyone should know

Introduction

The Tax Administration's construction reporting obligation is one of the most significant administrative obligations in construction. A neglected report can lead to a negligence fee, which is 15–45% of the value of the contracts left unreported and at most as much as 15,000 euros.

Yet in many small companies the reporting is done by hand from an Excel list, at the last minute and without an automatic check. In this article we go through the content of the obligation, the schedules and the most efficient way to handle the reporting without stress.

What does the construction report mean?

The construction reporting obligation is divided into two parts.

Contract report

Every party that buys a construction service is obliged to report the contracts to the Tax Administration when the contract value exceeds 15,000 euros (VAT 0%). The report records:

• The client's details
• The contractor's details (business ID, name)
• The contract value and the amount invoiced
• The contract schedule

Personnel report

The principal implementer is obliged to report everyone working on the site, including subcontractors' employees. The report includes:

• Name and personal identity code or date of birth
• Tax number
• Employer's details
• Type and duration of employment
• Country of residence

Schedule: when is it reported?

The reports are submitted monthly. The due date is the 5th day of the second month following the target month. In practice, for example, December's data is reported by 5 February.

Example: September's data is reported by 5 November.

A delay accrues a negligence fee, which can rise significantly. The reporting obligation also applies to unfinished contracts, and the data is updated monthly until the project ends.

The most common mistakes and how to avoid them

Based on practical experience, the most common problems are the following:

1. Missing tax numbers. Subcontractors do not always provide tax numbers in time. Ask for the tax number already when the contract is signed.
2. Forgotten people. Short-term substitutes or a subcontractor's extra workers are easily left off the list. An access-control integration collects the people automatically.
3. Inaccurate sums. The invoiced sum differs from the contract and the update is forgotten. An invoicing integration updates the sum automatically.
4. A late report. Deadlines are forgotten in the rush. An automatic reminder a week before the due date keeps the schedule.

Automatic reporting: how it saves time

When the site's data, that is people, hours and contract agreements, is in the same system, the construction report is created largely automatically. The responsible person's job is to check the data and submit the report, instead of gathering it by hand from several sources.

In practice an automatic system shortens the monthly reporting work from an hour to a few minutes.

Summary

The construction reporting obligation is a serious administrative obligation, the neglect of which leads to substantial penalties. A systematic process, the right data sources and automatic reminders turn meeting the obligation into a routine instead of stress. A digital system, into which data accumulates automatically, is the most efficient way to manage the obligation also in larger projects.