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Our areas of expertise include
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Corporate
- Company formation
- Acquisition of a company (M&A)
- Compliance
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Employment
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- Secondment
- Compliance
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Commercial
- Distribution, contracts & GTC
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The secondment of personnel to Belgium can raise a number of tax and legal issues for foreign companies. Is there an obligation to report when sending employees to Belgium? What is the Limosa declaration? What employment and tax regulations apply to the secondment of employees to Belgium? Our lawyers specialise in the various issues relating to cross-border employment and will be happy to assist you with your expatriation to Belgium.
The range of services offered by foreign companies in Belgium increasingly includes the cross-border provision of services such as assembly, repair and maintenance work as well as the execution of construction work.
If your company provides services across borders, you can use your own employees to do so. These employees are then „seconded“, i.e. sent by the employer to provide services in an EU Member State other than the one in which they normally work.
The provision of services in Belgium is subject to various legal, tax and administrative conditions. For foreign companies that send personnel to Belgium to fulfil orders, we offer comprehensive legal and tax advice. In addition to this, we also assist with all the practical steps involved in handling the posting regulations. Over the years, we have specialised in construction and assembly work.
When seconding personnel from one country to Belgium, there are several points to consider.
1. Applicable social security
Under European law, an employee is generally subject to the social security system of the country in which he or she works (the so-called „country of employment“ principle). However, posting is an exception to this principle, which means that, under certain conditions, the social security system of the country of posting continues to apply.
2. Applicable employment law
The applicable employment law must also be complied with. When seconding personnel to Belgium, a contract does not necessarily have to be drawn up in accordance with Belgian law, but foreign companies posting employees to Belgium for temporary cross-border secondment must at least comply with the mandatory protective provisions of Belgian labour law and the generally binding collective agreement provisions (working hours, minimum wage, remuneration, health and safety, etc.). For assignments of more than 12 months, all applicable Belgian employment conditions apply, with a few exceptions.
The Belgian social inspectorate checks compliance with the applicable employment law requirements and penalises breaches of the rules. To this end, documents proving compliance with the employment law requirements must also be provided (employment contract, payslip and proof of payment, time sheets, etc.) and a contact person must be appointed for the inspection authorities. High fines are regularly imposed for non-compliance with the posting requirements or the employment law provisions. Serious breaches of the rules may even result in the closure of the construction site.
You can find an overview of the main Belgian employment regulations in our overview of employment in Belgium.
3. Posting requirements
Before employees are seconded to Belgium, a number of requirements must be met. The aim of these requirements is to avoid social dumping. For example, you must apply for an A1 form in your home country to prove that the employees are still subject to foreign social security. You must then use this A1 form to submit a Limosa declaration in Belgium to inform the Belgian authorities that your employees will be working temporarily in Belgium. The declaration must be submitted before the first day of work in Belgium. There are other special rules in Belgium for work on construction sites, such as Checkin@work and Construbadge.
As compliance with the posting and notification obligations often requires at least two weeks‘ notice, foreign companies should find out about the posting and notification obligations, the documents required for this and the working conditions applicable in Belgium well in advance of the secondment.
4. Tax implications of the secondment
The secondment may also have tax implications for the employee, who may have to pay income tax in Belgium for the days worked in Belgium on the basis of the double taxation agreement. Belgian working days are usually exempt from income tax in your home country, and any income attributable to Belgium must be declared in a foreign tax return under the so-called progression proviso. However, it should be noted that the exemption is granted on the condition that proof of taxation in Belgium is provided (i.e. a Belgian tax return or tax assessment). It is therefore important to consider this in advance to avoid any potential surprises later on.
Longer secondment and frequent transfers of employees may also result in a tax liability for the sending company in Belgium. Due to the double taxation agreement between Belgium and your home country, for example, a posting to Belgium can result in the foreign company having to pay tax in Belgium on the Belgian profit. This is generally perceived as unpleasant, but there are usually ways to avoid these taxes. You will need to take this into account when setting up the secondment structure.
When carrying out work in Belgium, you will also need to consider the correct VAT treatment of supplies and other services. It may be mandatory and/or useful to activate a Belgian VAT number, which means that you may have to charge Belgian VAT and file VAT returns in Belgium.
Further information on the tax consequences of a secondment can be found on the tax law page.
We have prepared a posting overview for our clients that summarises the current posting conditions, employment law provisions, other reporting obligations and the tax framework that you must observe if you, as a foreign company, wish to second your employees to Belgium for a specific assignment. The overview is based on our experience with secondment issues, which we are confronted with on an almost daily basis.
We can make the Limosa declaration for you in Belgium and also advise you on Belgian employment law. Finally, we can assist you with all questions relating to the tax consequences of the secondment (both with regard to corporation tax, payroll tax and VAT).
If necessary and desired, we can also relieve your company of the administrative burden that may be associated with a secondment, such as payroll and financial accounting. secondment.
5. Payroll accounting
If your seconded employees are subject to income tax in Belgium, this results in a salary split. In this case, the salary earned in your home country is taxed in that country, while the salary earned in Belgium – during the secondment – is taxed in Belgium. In the case of a salary split, you must use a social secretariat (a recognised payroll office) in Belgium for your payroll. They will prepare the pay slips for the wages earned in Belgium and take care of the payment of the wage tax to the Belgian tax authorities.
A close relationship between us and the payroll office is useful, especially in the event of cross-border payroll problems. Our payroll partner can provide you with a no-obligation quote.
6. Accounting
The same applies to corporation tax and VAT: if your company needs to pay corporation tax on Belgian profits or activate a Belgian VAT number, you will need to work with a Belgian accountant or tax advisor. They will file the corporation tax and/or VAT return for your company in Belgium. They can also prepare and file income tax returns for the wages and salaries earned by your employees in Belgium. Our accountancy partner will be happy to provide you with a no-obligation quote.
Do you have any questions?
Do you have any questions about market development? Do not hesitate to contact our specialist lawyer for employment and commercial law Marco Wirtz. By email at m.wirtz@euregio.law or by phone +32 11 29 47 01.
