Human Capital Fire Chat 16 April 2013

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
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