In the case C-137/11 (Partena VZW/Les tartes de Chaumont-Gistoux SA), the ECJ decided that the irrefutable presumption in the Belgian legislation, of being subject to the Belgian legislation on social security for the self-employed when executing a mandate as a director (the activity) abroad in a company that is established in Belgium, is contrary to the principles of freedom of movement and of residence.

Prejudicial question

The Labour Court in Brussels wanted to know whether the management from abroad of a company in a Member State can be treated the same as the exercise of such activity within that Member State, despite the powers of every Member State to define the conditions for coverage by its social security scheme. In other words, can an activity (in this case, the position of a director) that is exercised abroad still be regarded as having been exercised in Belgium without it being possible to evidence the contrary?

The Court

After having examined its competence and the admissibility of the question, the Court stated that the place where the occupational work is performed is decisive in determining which social security legislation applies. This precedes the Member States’ qualification of the work as salaried work (employee) or work other than salaried (as self-employed).

The concept “place of execution” of the occupational work is not determined by the internal legislation of each Member State, but rather by European Union law. This is the place where the person concerned actually performs the actions connected with such work.

However, by making the presumption irrefutable, the Belgian legislation breaches the principle of freedom of movement.

Practical consequence

Based on this decision, a director of a company that has its registered office in Belgium can show that he or she does not execute this activity within Belgian territory. Consequently, where appropriate, he or she shall not be subject to the Belgian social security legislation for self-employed persons. Mind however: this judgment only applies to the facts of the case at hand. The facts of another case have to be identical to be able to invoke the principles of the decision. The legislator has to intervene. 

This Court decision also applies to third-country nationals when they fall within the scope of application of the EU Regulation (1408/71 or 883/2004 – the principles of Annex VII are not taken over by the latter). As such an Australian national being appointed as a director of a

Belgian company would not be able to invoke this decision. If that latter Australian national would however also be residing on the French territory, the Court's decision would be applicable on his mandate exercised in a Belgian company. 

It is therefore advisable to revaluate current situations in the light of this Court decision.