The EU Commission ruling: a contradictory viewpoint with significant implications

Recently, the European Commission announced via a press release that it would be referring Belgium to the EU Court of Justice, on the grounds that the country’s restrictions on accountants offering services in related disciplines are incompatible with the EU Services Directive of 2006.

Currently, Belgian legislation does not allow an accountant to provide services as a real-estate agent or insurance broker, or to perform financial activities. However, the Commission is of the view that this prohibition is not in line with the multidisciplinary activities article of the EU Services Directive. Indeed, it believes that there are less restrictive means to secure independence, impartiality and professional ethics.

So why is this of interest to the accounting and audit profession?

The EU Commission – a contradictory viewpoint

Although it is economically liberal and apparently conducive to opening up the Belgian real estate sector to greater competition, The European Commission’s outlook with regard to this particular issue, appears to be in some contradiction to past reforms, such as that concerning auditors and audit firms offering non-audit services to audit clients.

Equally confusing are the recent EU Audit reforms, as implemented in the Audit Regulation and Audit Directive of 2014, in which the Commission was moving to severely restrict the services that auditors can provide to audit clients. Fast forward to today, and the Commissions seems anxious to encourage multidisciplinary service provision by accounting firms (granted that this case is aimed at accountants, not auditors; we appreciate the distinction). So, it is not hard to see where the confusion lies.

Constraining or clear cut?

Previous proposals at EU level to restrict or eliminate or severely restrict multidisciplinary accounting firms were thankfully not adopted but EU policy-makers indicated strong support for ‘audit only firms’ or ‘audit only clients’. What was delivered by the EU audit reforms was a more restrictive environment around the provision of non-audit services at client level - but the line of thinking was clear cut.

Accordingly, the current Belgian legislation does not allow an accountant to provide services as a real estate agent or insurance broker, nor perform financial activities. All other activities, such as crafts, agricultural activities, etc., are also forbidden unless these are needed to support the primary service or activity, do not jeopardise independence, and do not create a conflict of interest.

Contrastingly, in its press release, the Commission suggests that excessive constraints on service providers can unnecessarily prevent qualified candidates from accessing jobs - be it in cross-border situations or domestically. It also noted that removing the restrictions on services provided by accountants could lead to increased consumer choice and lower prices, as well as helping to create new jobs for qualified candidates in the sector.


The Commission argues that Belgium’s prohibition is not in line with the Services Directive, and that there are less restrictive means to secure independence, impartiality and professional ethics.

This is in line with the thinking of the audit profession as to why very restrictive non-audit services provisions are not necessary to ensure the independence of the statutory auditor and how there are other means to achieve such independence, whilst also promoting competition.

Keeping an eye on the EU

As always, cases before European courts move slowly but it is likely that, in time, Belgium will be forced to amend its rules in this area. Erik Van Den Broeck, head of Real Estate & Construction at BDO Belgium commented that accountancy firms today often work closely together with letting agents to offer a complete set of services to real estate clients in reporting, facility and asset management. Opening up the boundaries between these professions would have to be monitored in terms of independence and compliance. However, the ruling will definitely open up opportunities for accountancy firms, real estate agents and insurance brokers and could lead to more intense collaboration or mutual acquisitions between these professions.

While the legal complexities of EU and Belgian law are not up for discussion in this article, and the separation of accountants and auditors is well understood, it would seem that one arm of the Commission views the issues around independence and conflict of interest quite differently to another.