Denmark has since 2012 allocated resources to coordinated authority control and audits at the companies to avoid social dumping. Social Dumping is when companies lower prices by means of cheating, for instance through tax evasion. With the fiscal budget for 2018, the coordinated authority control was extended to 2019 with additional 72 million DKK.
Wednesday May 2nd, the tax authorities conducted the third coordinated action against social dumping together with the police and the working environment authority, and 55 companies in total were inspected by the authorities.
Among these were 15 carefully selected companies at construction sites in Herning and Holbæk, which were audited for tax evasion, VAT evasion, and use of labor without work permits. The action was the latest effort against social dumping, and tax evasion for more than half a billion has been discovered in the building and construction sector alone. This is documented by the coordinated authority control against social dumping.
Especially non-Danish companies
It is especially the non-Danish companies and workers, that are responsible for the VAT and tax evasion discovered by the tax authorities, and according to the deputy director in the tax authorities, Johnny Schaadt Hansen, the building and construction industry is the most exposed sector.
- The sector is characterized by contracting non-Danish companies, while many Danish companies employ migrant workers. It is therefore only natural, that this area attracts our attention, when it comes to social dumping. The numbers show that we are looking in the right place, he says to Fagbladet 3F.
Out of the funds collected by the tax authorities when detecting social dumping across all sectors, almost half originates from the building and construction sector, according to the Fagbladet 3F.
Bad working conditions for migrant workers
According to the latest report from the coordinated authority control, there are also big problems with the working conditions.
In addition to the tax fraud, the working environment authority finds, that construction sites operated by non-Danish companies, have a tendency to use outdated and physically demanding work methods, and that the migrant workforce work and live under miserable conditions, without welfare measures such as a dining area, a toilet, and a shower.
In general, Danish companies employing many migrant workers have worse working conditions than Danish companies employing Danes.