Secondment of personnel to Belgium

The secondment of employees to Belgium can raise many tax and legal questions for foreign companies. Is there a reporting obligation during the posting of employees to Belgium? How should the A1 form be filled in Belgium? Which labour and tax laws apply and what are the requirements for posting employees to Belgium?

Belgium is a very popular trading partner for a lot of countries. 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 work in the construction industry. The provision of services is subject to various legal, tax and administrative requirements.

If you offer your services across borders, you can use your own employees to do so. These workers are then “posted”, a so-called employee secondment, i.e. they are sent by the employer to provide services in another EU Member State than the one in which they normally work.

We offer tax and legal advice to companies that post personnel to Belgium for the purpose of carrying out assignments. On the other hand, we also take care of all practical steps in the handling of secondment requirements.

The posting of workers from abroad to Belgium entails a number of important points that need to be taken into account.

1. Applicable social security: According to European law, a worker is in principle subject to the social security system of the country in which he or she works (the so-called “labour state principle”). However, secondment is an exception to this principle, which means that under certain conditions the social security system of the sending state continues to apply.

2. Applicable labour law: In addition, the applicable labour law must be observed. When posting employees to Belgium, it is not mandatory to draw up a contract in accordance with Belgian law, but foreign companies that post workers to Belgium in the context of temporary cross-border assignments must at least comply with the mandatory protective provisions of Belgian labour law as well as with the requirements of collective agreements that have been declared generally binding (working hours, minimum salary, remuneration, safety at work, etc.). For assignments exceeding 12 months, all applicable Belgian working conditions are even applied, with a few exceptions.

The Belgian Social Inspectorate checks compliance with the applicable labour law provisions and penalises breaches of the rules. For this purpose, documents proving compliance with the labour law requirements must also be provided (employment contract, pay slip and proof of payment, timesheet, etc.) and a contact person must be appointed for the inspection authorities. High fines are regularly levied for non-compliance with the secondment requirements or the labour law requirements. In the event of serious breaches of the rules, there is even the threat of closure of the construction site.

You can find an overview of the most important rules of Belgian labour law in our overview of the employment of personnel in Belgium.

3. Secondment requirements: Before workers are sent to Belgium, a number of secondment requirements must be fulfilled. The aim of these requirements is to avoid social dumping. For example, you have to apply for an A1 form in the home country to prove that the workers are still subject to social security in their home country. With this A1 form, you must then submit a Limosa declaration in Belgium to inform the Belgian authorities that your workers will be working temporarily in Belgium. The declaration must be submitted before the first day of work in Belgium. For construction site activities, there are other special requirements in Belgium, such as Checkin@work and Construbadge.

If the original employment contract does not explicitly provide for the possibility of secondment, it is advisable to sign a supplementary secondment agreement with the posted worker. The employer’s right of instruction is not sufficient to unilaterally order a (longer) posting. The secondment agreement regulates the rights and obligations for the period of the stay in Belgium. In principle, the original employment contract remains unaffected.

Since compliance with the secondment requirements and reporting obligations often requires at least two weeks’ notice, foreign companies should inform themselves well in advance of the assignment about the secondment requirements and reporting obligations, the documents required for this and the applicable working conditions in Belgium.

4. Tax implications of the secondment: The posting may also have tax implications for the employee, who may have to pay income tax in Belgium for the days he works in Belgium due to the double taxation agreement. A personal income tax exemption, often in the form of an exemption with progression, then applies for the Belgian working days in the home country. However, the exemption is only granted if proof of taxation in Belgium (Belgian tax return or tax assessment notice) is provided. It is important to think about this in advance to avoid surprises later on.

Longer assignments as well as frequent employee assignments may also trigger a tax liability in Belgium for the posting company. A secondment to Belgium can lead to the foreign company having to pay taxes in Belgium on the Belgian profit due to the double taxation agreement between Belgium and the foreign country. This is generally considered unpleasant, but there are usually ways to avoid these taxes. You will probably have to take this into account when setting up the secondment arrangement.

In addition, when carrying out work in Belgium, the correct VAT treatment of supplies and other services must also be taken into account. It might be mandatory and/or useful to activate a Belgian VAT number, which means that you might have to charge Belgian VAT and file VAT returns in Belgium.

For more information on the tax consequences of a posting, see the VAT page.

In our secondment overview, we have summarised for you the current secondment requirements, the labour law requirements, other reporting obligations and also the tax framework conditions that you need to take into account if you, as a foreign company, want to send your employees to Belgium for a specific assignment. The overview is based on our experience with secondment issues, which we are confronted with almost daily. This is understandable, as a secondment has many tax and legal implications.

Should you have further questions about secondment, you can of course contact us for advice at any time. We can guide your company from A to Z in the field of secondment. We can carry out the Limosa declaration in Belgium and also advise you on Belgian labour law, which applies at least in part to posted workers. Finally, we can assist you with all questions regarding the tax implications of the secondment (both in terms of corporate tax and personal income tax).

If necessary and desired, we can also relieve your company of the administration that may be involved in the secondment.

5. Payroll accounting: If your posted employees have to pay income tax in Belgium, a salary split occurs. This is because in this case the salary earned in the home country is taxed in the home country, while the salary earned in Belgium – during the secondment – is taxed in Belgium. In the case of a salary split, you have to work with a so-called social secretariat (a recognised payroll office) in Belgium for the payroll. They prepare the payslips for the wages earned in Belgium and take care of the payment of the payroll tax to the Belgian tax authorities.

A close link between us and the payroll office is useful, especially in the case of cross-border payroll problems. Our partner in the field of payroll accounting can provide you with a non-binding offer.

6. Tax advice and accounting: A similar situation applies to corporate tax and VAT: if your company has to pay corporate tax on Belgian profits or activate a Belgian VAT number, you need to work with a Belgian tax advisor. This tax advisor will file the corporate tax return and/or VAT returns for your company in Belgium. He can also prepare and file the income tax returns for your employees for the wages earned in Belgium.

Our tax advisory partner can provide you with a non-binding offer.

Secondment | Euregio Law & Tax