Belgium

Details

  • Service: Tax & Legal
  • Type: Business and industry issue
  • Date: 07/01/2013

Program law: the principal measures in social matters 

e-Tax Flash
The program law of 27 December 20121 introduces new provisions to fight against abuse in the field of social security, in the context of the fight against secondment fraud but also by introducing a general anti-abuse measure. It also makes some changes to the special social security contribution for supplementary pensions and to the regime for non-recurrent results-linked benefits.

General anti-abuse measure in the field of social security
The program law introduces the concept of abuse of social law, modeled after the general anti-abuse measure in tax law. Under the law, "there can be abuse of social law when, via a legal act or a qualification of a legal act, a person puts himself, contrary to the objectives of one or more provisions of social law, either outside the application thereof, or within their application”. In such cases, the legal act or the qualification of the legal act is not binding on the social security institutions and the social inspectors, unless a lack of intent is established on the part of that person.


Regarding the burden of proof, the law states that as a starting point, the authority that uses the anti-abuse measure must prove that an abuse exists. For that purpose, it must provide proof of an objective element.


Abuse in the meaning of these provisions will be determined by royal decree after consultation with the National Labor Council.


Fight against secondment fraud

  • Change of article 31 of the Law of 24 July 1987

 

According to article 31 § 1 of the Law of 24 July 1987, putting employees at the disposal of a third party, who executes a part of the employer’s authority over these employees, is prohibited in Belgium.


Does however not qualify as the exercise of authority:

  • the respect by the third party of the obligations regarding the well-being at work;
  • the instructions, related to labor time and the execution of the agreed work, given by the third party in execution of the contract (services agreement) which links him to the employer.

 

Due to the wording of the legal provision, problems relating to its application arose, which could constitute a source of abuse. This is why the program law clarifies the Law of 24 July 1987 on temporary work, interim work and putting employees at the disposal of users in a way that should allow a correct and transparent application of the prohibition of putting employees at one’s disposal.


It is thus clarified that, given a written contract that the user signed with the employer and that explicitly and in detail contains the instructions that can be given, the instructions given to employees by the user do not constitute an exercise of the authority of the employer.

 

  • Abuse of law under EU Regulation 883/2004 on the coordination of social security systems

 

A new provision has also been introduced to counter abuses established in the context of EU Regulation 883/2004 on the coordination of social security systems. This Regulation contains rules subjecting persons moving within the European Union to the social security system of a single Member State, in order to avoid the simultaneous application of national legislations and the complications that can result from it.

 

Is considered as an abuse, the establishment of a mechanism designed to make a working relationship benefit from the advantages linked to the rules on secondment or simultaneous employment in at least two states (as granted by EU regulations).

 

Where such abuse is found, the salary worker or self-employed person will be subject to the Belgian social security legislation if that legislation should have been applied in the absence of abuse. A person can be subject to Belgian social security before form A1 issued by the foreign competent institution is retracted (it is doubtful whether this practice complies with EU regulations).

 

If, in the absence of abuse, the legislation of another state should have been applied, the Belgian authority will, when abuse is found, inform the competent authority of the other State concerned. The burden of proof of the abuse lies with the authority that invokes it. The person concerned can provide counter-proof.

 

Change of the special social security contribution for supplementary pensions
A special social security contribution for supplementary pensions was introduced by the program law of 22 June 2012. During a transition period, the contribution of 1,5% affects premiums (paid by the employer or by a legal person) that exceed a threshold of EUR 30,000 (for salary workers and the self-employed). In the final regime (no later than 1 January 2016), the contribution will be due when the sum of the legal pension and the supplementary pension reserve converted into a monthly annuity exceeds the "pension objective".


More in particular, the new law clarifies the method of calculation and collection of the contribution. Thus from now on, with regard to the calculation, reference is made to amounts attributed to the accounts relating to the build-up of a supplementary retirement pension or survivors pension or, alternatively, to the variation of the reserves, and to premiums for death coverage.


In addition, consideration will be given to the data relating to the previous year to determine if the contribution is due and to calculate it.


It has also been made clear that variations of the reserves which correspond to the tax-neutral transfers of internal provisions are not taken into account to assess whether the threshold has exceeded EUR 30,000 and for the calculation of the contribution.


Non-recurrent results-linked benefits
Since 2008, companies can implement a system of wage bonuses/non-recurrent results-linked benefits, which enjoys a very favorable tax and social regime. This system consists of awarding a bonus if targets fixed beforehand are reached at the expiry date of a reference period.


The program law makes the following changes to the regime:

  • The annual maximum of EUR 2.200 (indexed at EUR 2.430 for 2012) is raised to EUR 3.100 ;
  • The special employer social security contribution of 33% is maintained. A new solidarity contribution of 13.07 % by the employee is added.

 

These changes have entered into force on 1 January 2013. The Social Security Service has confirmed to us by phone that the solidarity contribution will apply in all cases (thus also for bonus plans with a reference period in 2012 and payment in 2013). This position also appears from the questions from the MPs and the answers from the Secretary during the discussion by the competent House Committee (Doc 2561/008 p. 48).

 

 

 

1 Belgian Official Gazette of 31 December 2012.
 

 

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