Cross-border workers: Belgium now applies the principle of “requalification”
European regulations provide a set of rules to determine which social security legislation is applicable to people working simultaneously in two or more states within the European Economic Area (Switzerland, Lichtenstein, Norway and Iceland have also adopted these rules). This regulation ensures that an individual can only be subject to the social security system of one country at a time.
After determining the competent country, that country can either choose to qualify the activities according to its own legislation (“requalification”) or to adopt the qualification of the work state.
Although the principle of “requalification” is applied in most Member States, Belgium did not apply it in the past. This often led to problems regarding company directors. According to Belgian law, a company director is considered as a self-employed person and thus subject to the social security system for self-employed persons. In other Member States (e.g. United Kingdom, the Netherlands, Switzerland), company directors are regarded as employees.
As the application of two different social security systems (employed and self-employed) was often viewed as undesirable and discriminatory towards company directors who were only active in Belgium, the Belgian authorities decided to apply the principle of “requalification” with effect from 1 October 2018. Although only recently announced by the Belgian authorities, their position therefore takes retroactive effect.
As of 1 October 2018 the Belgian authorities are applying their internal legislation for the qualification of overseas activities. Only where the arrangements commenced during 2018 and upon explicit request, is it possible to immediately apply the revised position of the Belgian authorities (i.e. from 1 January 2018 at the earliest).
If necessary, one can retroactively be affiliated to the self-employed system and ask for a reimbursement of the contributions paid into the employee social security system.
For directors subject to Belgian social security law who are exercising corporate mandates abroad, it is recommended that their position is analysed. In most cases it will be more beneficial for them to only be subject to the social security scheme for self-employed persons.
Please reach out to your BDO contact in case you would like to receive some more information in this respect.