In this issue:
- The mobility budget: what benefits are there for employees?
- Sham self-employment: carefully assess the qualification of the labour relationship in light of the general and specific criteria set forth by Belgian legislation to avoid a requalification!
The mobility budget: what benefits are there for employees?
On Monday 3 December 2018 the government submitted a draft law on the introduction of a mobility budget to the Chamber of Deputies, scheduled to enter into force on 1 January 2019. Through this draft, the Government wishes to create a "modal shift", that is to change the mindset towards the way employees go to their place of work.
As a reminder, since the Act of 30 March 2018 on the introduction of a mobility allowance, employees meeting certain conditions can forego their company car in favour of alternative means of transportation and receive an amount of money in return.
The mobility budget presents a fundamental difference with the mobility allowance. Whereas the mobility allowance revolves around an “all or nothing” principle, the mobility budget does not force the employee to forego the company car in order to benefit from it. Nor will the employee need to choose between a company car and alternative means of transportation. As a matter of fact, the mobility budget shall be based on 3 pillars from which the employee can freely choose the one (s) he wishes to use, since these pillars can be cumulated.
What are the employee’s options? The draft law provides 3 different options, resulting in specific tax and social security treatment. The employees shall be able to choose:
|1st PILLAR||An eco-friendly company car, namely an electric car or a car meeting the ecological criteria imposed by the draft law AND/OR||Standard tax and social security treatment of a company car|
|2nd PILLAR||Alternative and sustainable transportation: soft mobility (all kinds of bicycles and motorcycles not exceeding 45 km/h as well as motorcycles exceeding 45 km/h provided that they are purely electric), public transportation, organized collective transportation, shared transportation (including taxis and other chauffeured car rental formulas) and living close to the place of work. AND/OR||Fully exempt for the employee and fully deductible for the employer|
|3rd PILLAR||The entire budget in cash or the remaining balance after deducting any expenses made in pillars 1 and 2.||Special 38.07% contribution by the employee|
What is the amount of the mobility budget? The amount of the mobility budget will be calculated based on the annual gross cost of the company car the employee would normally have benefited from, including tax and tax-related charges and costs related to the vehicle (funding, fuel, contribution, etc.).
Hence, the mobility budget will enable the employee to finance an eco-friendly company car, dedicate the balance of the budget to the use of sustainable means of transportation and, as the case may be, have the unused portion of this budget reimbursed in cash once a year. However, by imposing a special 38,07% levy on the employee, the government wanted to discourage the latter from choosing the 3rd pillar.
To whom does it apply? The mobility budget system depends on the will of the parties. Provided that certain conditions are met, the employer will be able to introduce a mobility budget in his company, for all employees or for part of them. The employee shall also meet certain conditions in order to submit a request to benefit from this possibility.
In conclusion, the mobility budget will enable the employee to choose an eco-friendly car and also use alternative means of transportation. The mobility budget, thus, offers the benefit of greater flexibility for the employee. However, if the employee wishes to forego his company car definitively and only receive an allowance, it will be more beneficial for him to turn to the mobility allowance, since the tax and social security treatment of the latter is more advantageous than the treatment of the 3rd pillar of the mobility budget.
The date of entry into force of the draft law of 3rd December 2018 is set on 1st January 2019.
Sham self-employment: carefully assess the qualification of the labour relationship in light of the general and specific criteria set forth by Belgian legislation to avoid a requalification!
In the judgment of 25 April 2018 the labour court of Brussels has recalled the specific criteria applicable to construction related services set forth by the Royal Decree of 7 June 2013.
In the case at hand a company active in the construction industry appealed to a decision of the labour tribunal which set forth that a Bulgarian person who had been providing services to the company as a self-employed contractor, was in fact an employee.
As a result of this requalification, the company was condemned to pay the social security contributions that are due for the employment relationship with the Bulgarian person as well as additional arrears and interests.
The labour court of Brussels carefully assessed the nine specific criteria and determined that the concerned Bulgarian person (i) only owned 5 of the 186 shares of the company (which is not considered to be a personal and substantial participation in the profits and losses of the company), (ii) received a fixed remuneration, (iii) did not have his own logo, (iv) only worked for one principal with material that was the property of the principal, and, as such, the refutable presumption exists that the Bulgarian person has in fact performed his tasks in the framework of an employment contract.
Even though the company tried to refute this presumption by arguing amongst others that the Bulgarian person would have signed the company’s share register, the labour court of Brussels indicates that this does not suffice as proof that someone is in fact self-employed. Moreover, the Bulgarian person would have been informed by the company that he could only work as a self-employed contractor in Belgium, which is not the case.
As a result, the decision of the labour tribunal in first instance was confirmed.
As the specific criteria that are applicable to construction related services partly coincide with the general criteria applicable to employees and employers who do not resort under any of the specific sectors, this judgment is an important reminder to carefully assess the qualification of a person as a self-employed contractor or employee on the basis of the general and specific criteria (taking into account the factual circumstances) to avoid any requalification and additional indemnities.
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HR Magazine by Frederic Brasseur
A considerable number of multinationals have a system in place whereby the members of the senior management in the subsidiaries receive equity awards such as RSU's or TRSU's directly from the foreign parent company, whereas they are employed by the Belgian subsidiary. Traditionally, the position was taken that these RSU's or cash bonuses were exempt of social security contributions, as they were not granted by the employer provided the subsidiary did not intervene in the process or in the costs. A recent change in the case law and in the instructions to the employers by the Belgian National Offices for Social Security makes it necessary to reconsider this subject.