- 08 Oct 2012
For the application of European law, the location where a professional activity is exercised is the location where, in practical terms, the person concerned carries out the actions connected with that activity.
The fourth subparagraph of Article 3(1) of Royal Decree No 38, such as interpreted by the Constitutional Court, provides that any person designated as director of a company liable to Belgian tax, which does not manage the company from Belgium, is irrebutably presumed to pursue in Belgium a professional activity.
Questioned by the Labour Court of Brussels, the European Court of Justice decided on 27 September that, for the company director who manages a Belgian company from another Member State, the non-rebuttable nature of the presumption that they pursue their activity in Belgium is contrary to European Law.
Indeed, the Court considers that the "location of exercise" of the professional activity must receive a uniform definition and be understood as referring to "the place where, in practical terms, the person concerned carries out the actions connected with that activity".
Therefore, persons designated as directors of a Belgian company can now prove that they pursue their activity from another Member State, and be exempt from liability under the Belgian social security regime for self-employed persons because of such activity.
In addition, this decision might have an impact on the qualification of the director's activity, and even on the determination of the State of liability, since it is for the State within which the activity is in practical terms pursued to determine whether it constitutes an employed or self-employed activity.
> Action point
Determine the State within which the company director's activity is in practical terms pursued, as well as the qualification given by such State's legislation to the activity of the director (employed or self-employed activity), and its eventual impact on the determination of the State of liability.