Belgian Labour Law New Measures on Labour Law Brussels, 8th of March 2018

Content Employers’ social contributions Benefits in kind & Cash for Car measure Profit-sharing bonus Posting of employees Notice periods

Employer’s Social Contributions Tax shift  makes Belgium more competitive 2016: Reduction of the employer’s social contributions rate Modification on the structural reduction Review of the first hirings measure 2018: New reduction of the employer’s social contributions rate New change of the structural reduction 2019: Review of the structural reduction

Employer’s Social Contributions 2018: decrease of the social contributions rate Almost all the employers (except non profit making sector …) Basic rate: 30%  25% + sectorial specific contributions + legal holiday pay contributions for blue-collar workers

Employer’s Social Contributions 2018: review of the structural reduction Removal of the lump sum of €438 Removal of the extra reduction for the high wages Increase of the reduction for wages under €2,950

Employer’s Social Contributions First hirings measure:  Life time exemption on the basic employer’s social contribution ends on the 31 December 2020

Benefits in Kind IT tools for professional & private use Social contributions & income tax National Social Security Office and Tax Administration had different opinions The value of those benefits has been reviewed since the 1 January 2018 Have to be displayed on the payslips

Benefits in Kind Tool Until 31 December 2017 From 1 January 2018 PC & Laptop €15 per month €180 per year €6 per month €72 per year I Pad Real value €3 per month €36 per year Per I Pad Smartphone Soc. Sec. €12.50 per month €150 per month Taxation Per smartphone Phone subscription €4 per month €48 per year Fixed or mobile Internet connection €5 per month €60 per year

Cash for Car Project – Not yet adopted Enable employees to return their company car for a mobility allowance Employer’s decision to offer this possibility Employee has to apply for it (by written) Conditions: Employer: fleet for 36 months (except employer starter) Employee: car for 3 months & 12 months within the last 36 months

Cash for Car How much? 20% of 6/7 of the car value + 20% if fuel card Social treatment No remuneration Employer: no ordinary social contributions but a solidarity contribution Employee: no social contribution

Cash for Car Fiscal treatment Taxable advantage  Income tax is applicable 4% of 6/7 of the value of the car (taxable amount) The amount of the allowance exceeding the taxable advantage is exempted

Cash for Car Example Company car (catalogue value of €37,500, CO2 emissions of 115 g/km, diesel engine, first registration on 1 January 2016) : - Mobility allowance: €642.86 per month - Employer’s social contributions: €45.27 per month - income tax: €57.32 per month - Net for the employee: €585.54 per month - Cost for the employer: €688.13 per month (€642.86 + €45.27)

Profit-Sharing Bonus Scheme for participation in company profits reviewed Possibility to grant a bonus based on company’s distribuable profits 1 January 2018

Profit-Sharing Bonus What kind of bonus? - Identical (each employee gets the same amount) - By category of employees - No individualization - No replacement of an existing remuneration Who can use this bonus scheme? - Employer: subject to income tax or non-resident tax - Employee: under employment relationship (subordination)

Profit-Sharing Bonus How much? How is it set up? - Employer’s decision Max. 30% of the total payroll (gross basis) How is it set up? - Employer’s decision - Not recurrent - Identical bonus for each employee : G.A. decision - Bonus by category: specific procedure (ex.:collective labour agreement)

Profit-Sharing Bonus Social treatment Tax treatment - Employer: no social contributions - Employee: 13.07% Tax treatment - Employer: non-deductible expense for corporate tax (29% in 2018) - Employee: 7%

Posting of Employees European Directive (2014/67/EC) Implementation into Belgian law Act of 11 December 2016 Royal Decree of 14 September 2017

Posting of Employees Short assignment in Belgium (24 months) Mandatory Belgian labour law provisions are applicable Employee remains in the social security system of the country where he is employed Certificate of coverage (A1 form) Limosa declaration

Posting of Employees Obligation for a foreign employer to appoint a liaison person (physical person) No obligation to be a Belgian resident The employer, an employee, anyone… Acts as a contact person with the Belgian authorities Holds the social & labour documents

Posting of Employees Appointment of liaison person through the Limosa declaration Person of liaison’s details & coordinates His capacity Nature of the services carried out in Belgium Temporary work: accreditation number Construction sector: comparable benefits in their home country as in Belgium Etc.

Notice Periods 01/01/2014: harmonization of notice periods trial period removed 01/01/2018: new notice periods

New Notice Periods Length of service Length of service notice period till 31.12.2017 < 3 months 2 weeks 3 months < 6 months 4 weeks 6 months < 9 months 6 weeks 9 months < 12 months 7 weeks 12 months < 15 months 8 weeks 15 months < 18 months 9 weeks 18 months < 21 months 10 weeks 21 months < 24 months 11 weeks 2 years < 3 years 12 weeks 3 years < 4 years 13 weeks 4 years < 5 years 15 weeks as of 5 years 3 weeks per commenced year 20 years and 21 years 2 weeks per commenced year as of 21 years 1 week per commenced year Length of service notice period from 01.01.2018 < 3 months 1 weeks 3 months < 4 months 3 weeks 4 months < 5 months 4 weeks 5 months < 6 months 5 weeks 6 months < 9 months 6 weeks 9 months < 12 months 7 weeks …

Contact Jinbao ZHANG International Social Advisor International@groups.be + 32 2 507 18 80 www.groups.be