Organising and participating in neighbourly work
Voluntary projects are arranged for purposes such as to help relatives, acquaintances or neighbours, to manage matters related to one’s own housing company or to support the activities of sports clubs. No compensation will be paid for participation in voluntary projects, and these no not usually require special expertise. The work lasts for a limited period of time and is temporary in nature.
Individuals as well as housing companies, school classes, organisations and other communities or municipalities can organise voluntary projects. Companies cannot organise voluntary projects for their normal work, but they can participate e.g. in organising public-interest activities.
People participating in voluntary projects provide their work input for the benefit of the person in need of help or for the benefit of others voluntarily and free-of-charge.
Voluntary projects can include cleaning, moving help, renovation, yard work, cooking or any work suitable for volunteer work. For example, the foundation for a single-family house socle or a small renovation of an apartment can be completed as a voluntary project with skilled friends or relatives.
Voluntary projects do not usually require special expertise. The duration of the work must be limited and the workload reasonable.
Work for which the person carrying out the work should receive remuneration, compensation or other benefits cannot be carried out as a voluntary project. If necessary, the organiser of a large voluntary project must be able to demonstrate that no compensation has been paid for the work.
Work that requires special expertise cannot be carried out as a voluntary project or in exchange for other work. For example, an accountant and an architect cannot offer each other their own work using the mutual voluntary project model. Both must invoice each other for their work so that the work is normally within the scope of accounting and taxation.
Voluntary projects do not fall within the scope of the Occupational Safety and Health Act, but the organiser may still be liable for damages. The organiser must assume responsibility for the health and safety of the participants. Similarly, people participating in voluntary projects are obliged to use the protective equipment and aids they have been given.
Work involving a great deal of responsibility or risk should not be carried out in voluntary projects. Assigning responsibility for such matters as construction errors to voluntary project participants is very difficult in practice.
It is not mandatory to insure participants, but it is highly recommended for example in construction work. A private person's voluntary project insurance also covers all persons outside their family participating in the voluntary project.
Housing companies can also take out voluntary insurance project policies. These policies generally provide compensation to the residents for any damage caused during voluntary projects or other unpaid work. The party to who is injured for applies for compensation from the insurance company. The housing company is obliged to provide an account of the incident.
Wages and other benefits are not paid to people who participate in voluntary projects, nor are they usually reimbursed for expenses. The organiser usually offers meals and beverages and can even heat a sauna for volunteers.
Traditional voluntary projects, i.e. work without compensation, do not result in tax consequences for the participant or for the party for whose benefit the work is carried out. Work that directly benefits the community and for which no wage is paid is also free of tax consequences. For example, the maintenance of the sports field or ticket sales at an association's event do not generate taxable income, and they do not involve an obligation to report.
The Tax Administration will decide on the tax treatment of other types of voluntary work on a case-by-case basis. The members of an association may work for a party that pays compensation to the association for the work. In this case, the Tax Administration decides whether it is tax-free voluntary work, the association's taxable business activities or, for example, a situation in which a person transfers his or her taxable income to an organisation.
Fundraising by various associations is very often a voluntary activity carried out by their members. Similarly, sports clubs may fund its activities through voluntary work or organising a bake sale, for instance. In some cases, voluntary work may be subject to taxation.
Tax legislation does not include a detailed definition of voluntary work; instead, this is determined on a case-by-case basis. Under certain conditions, work for which a person receives some sort of remuneration may also be considered a voluntary project.
For detailed instructions on taxation concerning voluntary projects, see the website of the Tax Administration: