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Brussels HR Law Focus Newsletter No.5

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Belgium

In this "HR Law Focus" newsletter we focus on certain developments in respect of international mobility of workers.

Our "HR Law Focus" newsletter is released every time we judge that new legislation or case law might be important for your business. In this newsletter we focus on certain developments in respect of international mobility of workers.

Sixth State Reform - what to expect for immigration issues?

As from 1 July 2014, each Region in Belgium is able to determine for itself the legal criteria necessary to grant work permits and professional cards to third-country nationals (i.e. non- EEA citizens, with exception to Swiss citizens; on the other hand, Croatian citizens still require a work permit to work in Belgium) under section 22 of the 6th State Reform Act of 6 January 2014. This was still within the competence of the federal authorities until 30 June 2014 (Act of 30 April 1999 and RD of 9 June 1999 on the employment of foreign nationals). On the basis of our regular contacts with the various regional authorities, it seems that no immediate legislative change is to be expected in any of the regions. In principle, the existing criteria will remain unchanged for the weeks/months to come. In the future, however, the regions are likely to adopt specific legislation. We will keep you posted in this newsletter on any changes which might occur.

It is also important to note that regional governments will now have to implement the EU directives on upon immigration, such as the one on a single permit for third-country nationals to reside and work in the territory of a member state, which had to be transposed into Belgian law by 25 December 2013, but which still has not been done. We will keep you updated on how these issues are addressed in the respective governments’ declarations and in what direction they are moving forward.

Sixth State Reform - special tax regime for foreign executives

In the framework of the 6th State Reform, changes are also made to the taxation of non-residents (although this will remain a federal power).

For tax-calculation purposes, the category of "non-residents with an abode in Belgium" will be repealed.

This change could have an important effect on those benefiting from the special tax regime for foreign executives. As a result of the change, for each tax year for which their Belgium sourced earned income does not amount to at least 75% of their total earned income, foreign executives will – despite living in Belgium with their families throughout the entire tax year – be considered as "regular" non-residents (whereas they previously qualified as "non-residents with an abode in Belgium"). As regular non-residents, for the purposes of calculating tax, they will no longer be able to claim the marital quotient, tax deduction for dependent children, tax-exemption thresholds, etc.. This could lead to substantial changes in net pay for employees whose remuneration has been determined on a gross basis.

Language decree amended in Flemish region 

In application of the Flemish Decree of 14 March 2014, the use of Dutch in employment relations is changed further to the ECJ’s Anton Las v. PSA Antwerp NV decision of 16 April 2013 (case no. C-202/11 – see our newsletter). Now, employees residing in another EU or EEA member state or making use of the principle of the free movement of persons/workers/establishment and attached to a place of business in the Flemish Region can also have their employment contract written in a language other than Dutch (provided it is the language of an EEA member state). The contract in the other language is valid in addition to a Dutch version, which continues to be required, failing which a fine may be imposed.

Posting workers in the framework of the provision of services

A new directive 2014/67 of 15 May 2014 concerning the posting of workers in the framework of the provision of services has been published in the Official Journal of the EU. This directive sets out limits on the posting of workers by giving member states greater means to combat abuse.

The new directive came into force on 18 June 2014 and has to be transposed by the member states into their domestic laws by 18 June 2016. The directive “aims to guarantee compliance with the appropriate level of protection for the rights of posted workers whilst facilitating exercise of the freedom to provide services by service providers and favouring fair competition amongst them.”

We will carefully monitor implementation of the directive. It will entail closer follow-up and prosecution of infringements of Belgian law where mobile employees are assigned or have simultaneous employment involving Belgium, on top of the measures already taken and commented on in our previous newsletters. Watch this space.

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