Human Capital Fire Chat

Recent employment law developments: harmonization & self employed Liesbeth de Crom and Noémie Niesten 16 April 2013

Harmonization of white- & blue- collar statuses

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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?

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Harmonization in practice – the big picture

“Upwards” harmonization

“Downwards” harmonization

Acquired rights theory

Salary freeze

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Harmonization in practice – solutions?

Global solution = hierarchy of the norms?

Specific solution = Extralegal pension

Developments self-employed status - “Labour Relations Act”

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Developments on self-employed status ISSUE

Incorrect qualification of professional

activities

Requalification

Impact

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Developments on self-employed status

Labour Relations Act 27 December 2006

General criteria Specific criteria 5/9 = employee

Sectors?

Ruling

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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

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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

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Commuter and HQ Functions

Human Capital Fire Chat 16 April 2013

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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

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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

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General Anti Avoidance Rules (GAAR)

Local

Global

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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

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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

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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

►…

?

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