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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
Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, accountancy,
transaction and advisory services. Worldwide, our 167,000 people
are united by our shared values and an unwavering commitment to
quality. We make a difference by helping our people, our clients
and our wider communities achieve their potential.
For more information, please visit www.ey.com/be.
Ernst & Young refers to the global organization of member firms of
Ernst & Young Global Limited, each of which is a separate legal
entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. The services
offered by Ernst & Young in Belgium refer to services offered by
Ernst & Young Bedrijfsrevisoren/Réviseurs d’Entreprises
BCVBA/SCCRL, Ernst & Young Tax Consultants BCVBA/SCCRL,
Ernst & Young Accountants BCVBA/SCCRL, Ernst & Young
Special Business Services CVBA/SCRL or their respective
associated companies in Belgium, each of which is a separate
legal entity and have their registered offices at De Kleetlaan 2,
1831 Diegem, Belgium.
This publication contains information in summary form and is therefore
intended for general guidance only. It is not intended to be a substitute for
detailed research or the exercise of professional judgment. Neither EYGM
Limited nor any other member of the global Ernst & Young organization can
accept any responsibility for loss occasioned to any person acting or
refraining from action as a result of any material in this publication. On any
specific matter, reference should be made to the appropriate advisor.
www.ey.com/be
© 2013 Ernst & Young
All rights reserved

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Human Capital Fire Chat

  • 1. Recent employment law developments: harmonization & self employed Liesbeth de Crom and Noémie Niesten 16 April 2013
  • 2. Harmonization of white- & blue- collar statuses
  • 3. 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?
  • 4. Page 4 Harmonization in practice – the big picture “Upwards” harmonization “Downwards” harmonization Acquired rights theory Salary freeze
  • 5. Page 5 Harmonization in practice – solutions? Global solution = hierarchy of the norms? Specific solution = Extralegal pension
  • 6. Developments self-employed status - “Labour Relations Act”
  • 7. Page 7 Developments on self-employed status ISSUE Incorrect qualification of professional activities Requalification Impact
  • 8. Page 8 Developments on self-employed status Labour Relations Act 27 December 2006 General criteria Specific criteria 5/9 = employee Sectors? Ruling
  • 9. 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
  • 10. 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
  • 11. 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
  • 12. Commuter and HQ Functions Human Capital Fire Chat 16 April 2013
  • 13. 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
  • 14. 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
  • 15. General Anti Avoidance Rules (GAAR) Koen Bonnast and Yves Stox 16 April 2013
  • 16. Page 16 General Anti Avoidance Rules (GAAR) Local Global
  • 17. 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
  • 18. 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
  • 19. 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 ► … ?
  • 20. 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
  • 21. Page 21 Ernst & Young Assurance | Tax | Transactions | Advisory About Ernst & Young Ernst & Young is a global leader in assurance, tax, accountancy, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information, please visit www.ey.com/be. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. The services offered by Ernst & Young in Belgium refer to services offered by Ernst & Young Bedrijfsrevisoren/Réviseurs d’Entreprises BCVBA/SCCRL, Ernst & Young Tax Consultants BCVBA/SCCRL, Ernst & Young Accountants BCVBA/SCCRL, Ernst & Young Special Business Services CVBA/SCRL or their respective associated companies in Belgium, each of which is a separate legal entity and have their registered offices at De Kleetlaan 2, 1831 Diegem, Belgium. This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither EYGM Limited nor any other member of the global Ernst & Young organization can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. www.ey.com/be © 2013 Ernst & Young All rights reserved