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Human Capital Fire Chat 16 April 2013
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Recent employment law developments: harmonization & self employed Liesbeth de Crom and Noémie Niesten 16 April 2013
Harmonization of white- & blue- collar statuses
Page 3
Harmonization white- & blue- collar workers
Constitutional Court Case -125/2011
Distinction white- & blue- collar
unconstitutional
Action required: Harmonization of
statuses Dismissal & Waiting
period in case of illness Deadline: 8 july 2013
Other areas of social law
Deadline: not fixed
Issues? Issues?
Issues?
Page 4
Harmonization in practice – the big picture
“Upwards” harmonization
“Downwards” harmonization
Acquired rights theory
Salary freeze
Page 5
Harmonization in practice – solutions?
Global solution = hierarchy of the norms?
Specific solution = Extralegal pension
Developments self-employed status - “Labour Relations Act”
Page 7
Developments on self-employed status ISSUE
Incorrect qualification of professional
activities
Requalification
Impact
Page 8
Developments on self-employed status
Labour Relations Act 27 December 2006
General criteria Specific criteria 5/9 = employee
Sectors?
Ruling
Page 9
General and specific criteria
► General criteria: ► the nature of the agreement as
explicitly chosen by its parties ► freedom to organise working time ► freedom to organise the agreed
work ► impossibility of hierarchical
supervision.
► Specific criteria: ► No financial or economic risk ► No responsibility with respect to the
customer’s financial means ► No decision-making power
regarding the client’s purchasing policy
► No decision-making power on the customer’s pricing
► No obligation to reach results ► Guaranteed fixed fee ► No own personnel /possibility to be
replaced ► Working mainly for one contractual
party ► Office spaces, working tools
provided by client
Page 10
Administrative Commisssion
Ruling qualification professional
activities
Initiative: either party
Administrative Commission
Max. 3 months!
Ruling on qualification: valid for 3 years
Possible requalification
Impact!
Appeal: labour courts
Page 11
Contact us at
► liesbeth.de.crom@be.ey.com – 32 (0)3 270 45 46
► noemie.niesten@be.ey.com – 32 (0)2 774 90 10
Commuter and HQ Functions
Human Capital Fire Chat 16 April 2013
Page 13
Commuter & Headquarter functions
Typical cases ► Project ► Training program ► Short term assignment ► Frequent visitors / travel ► Flex work pattern (1-2 d/week) ► HQ function
Country of RESIDENCE
Country of EMPLOYEMENT
Page 14
Taxation of employment income Art 15 OECD ► General principle: country of employment (Host) ► Exception:
183 days in Host?
Host ‘employer’?
Host PE?
< 183 days > 183 days
HOME TAXATION HOST TAXATION
No permanent establishment
Permanent establishment in Host
Negative integration test
►Positive integration test
►Additional factors
AND
OR
OR
AND
General Anti Avoidance Rules (GAAR) Koen Bonnast and Yves Stox 16 April 2013
Page 16
General Anti Avoidance Rules (GAAR)
Local
Global
Page 17
Global – Risk Mitigation
► Service level agreement (TP)
► Permanent establishment
► Assignment agreement
► Lease of staff ► False posting
► Form A1/E101 ► Limosa
► Posting ► Simultaneous
employment
Social security
Corporate/individual taxation
Anti avoidance rule
Assignment to Belgium Working time pattern
5% per country
Coherence
Employer’s authority
Integration in host entity and cross-
charging
Page 18
Key posting conditions
Employer’s authority – Company integration
Company integration
Lease of staff
Anti avoidance rule
Decision making power by home/host
►Dismissal ►Who determines the
nature of the work ►Obligation with regards
to remuneration
Binding force Form A1
Page 19
General Anti Avoidance Rules - OTC
Global Local
Personal income tax Art. 344 ITC
Social security
By Royal Decree
Constitutional? ►OTC options ►Post termination
indemnity non- compete
►…
?
Page 20
Contact us at
► koen.bonnast@be.ey.com – 32 (0)3 270 12 88
► yves.stox@be.ey.com – 32 (0)2 774 99 07
Page 21
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