NEW REFUTABLE PRESUMTIONS FOR SELF-EMPLOYED SUBJECT TO BELGIAN SOCIAL SECURITY
09 September 2014
During many years problems have occurred in the differences between employees and self-employed, mainly caused by the social security contributions which are considerably higher for employees than for self-employed.
Both case law and legislation have tackled this issue, leading to several guidelines and adjustments.
Also recently legislation has changed once again.
A self-employed according to Belgian law is every person who pursues a professional activity in Belgium for which he is not bound by an employment contract or a statute. (art. 3 § 1, 1° RD n° 38)
A specific situation is that of the corporate mandates to which 2 irrefutable presumptions were applicable: the presumption that exercising a mandate is a self-employed activity as well as the presumption that such activity was located in Belgium.
Up to now these presumptions were irrefutable. However, the irrefutability has, been considered to be unlawful and contrary to EU legislation. See amongst others: http://www.bdo.be/en/news/professional-news/2012/onweerlegbaar-vermoeden-zelfstandige-activiteit-bestuurders/
The old presumptions were cancelled and as from 6 June 2014 replaced by two new presumptions which are now refutable.
New refutable presumptions
From now on company directors and other agents holding a corporate mandate are refutably presumed to carry out an activity as a self-employed.
In particular it concerns the exercise of a mandate in an association or company by law or in reality which occupies itself with an exploitation or with profitable transactions. (art. 3, § 1, 4° RD n° 38 and art. 2 RD December 19, 1967).
For example, from now on the director of a limited liability company (NV) may prove that in reality he is not pursuing a professional activity (see further on in respect of non-remunerated mandates).
The second presumption concerns the location of this activity.
The self-employed professional activity due to a mandate in an association or company liable to pay Belgian corporate income tax or Belgian non-resident income tax is refutably deemed to be exercised in Belgium. (art. 3, § 1, 5° RD n° 38)
As such this creates the possibility for a foreigner to prove that managing the Belgium company is not carried out on the Belgian territory, but rather from abroad. This is important to determine the applicable social security scheme both within the EU as outside.
In order to demonstrate that no mandate is being exercised, the only available option is to prove that the mandate is free of charges.
Proving that a mandate is non-remunerated can be done either by:
- a statutory provision or, if there is no such clause,
- a decision of a company body competent to determine the remuneration of corporate mandate holders.
New is that this statutory provision or decision can only be retro-actively applicable for a maximum of 12 months as from the month in which the provision or decision:
- was published in the annexes of the Belgian Official Gazette;
- or was communicated to the social security fund to which the mandate holder is affiliated or, in case there is no affiliation, the national fund.
Finally the proof of the existence of a non-remunerated mandate cannot be accepted in case:
- this mandate leads to an income for company directors or
- when the involved association or company contributes to or pays insurance premiums for the creation of an extra legal pension for the mandate holder.
This is applicable as from the year related to the income, contributions or premiums. (art. 2 RD December 19, 1967)
A Royal Decree still needs to be published in respect of the possibilities of proving that a mandate is not being exercised in Belgium.