The New Tax Regime for Inbound Taxpayers and Researchers

For further details we refer to our previous articles ‘New Year, New Tax Regime‘ and ‘COVID 19 and the Expat Status‘, but in summary the new regime states that providing conditions are met, an employer can pay tax free allowances as reimbursement of costs proper to the employer up to 30% of the gross salary (capped at €90.000, possibly indexed as from 2024). If applied, these tax free allowances are to be paid on top of the contractual salary.

The new tax regime for expats has been applicable as from January 1st, 2022, but the 1983 expat regime did not cease to exist with immediate effect. Indeed (and luckily), transitional measures were put in place, to avoid sudden loss of tax benefits and decrease net pay of expats involved.

The Transitional Period and its End

When introducing the new tax regime for expats, the legislator created “opt-in” or “opt-out” possibilities for persons who were benefiting form the 1983 special tax regime for expats. In summary:

  • If on January 1st, 2022, one had benefited from the 1983 expat status for less than 5 years and they met the criteria for the new regime (in a retroactive consideration), an application for the new regime could be filed. If approved, the new expat tax regime can be applied for (as from January 1st, 2022) for the “remaining period” of the 5 (or 8) years under the new tax regime.
  • If on January 1st, 2022, one was benefiting from the 1983 expat status and did not meet the criteria for the new regime (or a request to apply it was refused), there was a transition period of 2 years. After these 2 years, the old regime ceases to be applied (whilst also the new regime is not acquired).

This 2 -year transitional period started on January 1st, 2022 and ended on 31St December 2023. This means that, finally, the final curtain has fallen over the 1983 expat status.

Most employers and their expats have anticipated this change by renegotiating the salary package or, in some cases, by returning home.

The Main Changes

For those expats or employers who have (unwillingly) neglected the issue, it is important to analyse the situation and take action. Let’s summarize once more the three major tax benefits of the 1983 expat status:

  • The expat and his family members, even when living in Belgium, were always treated as non-residents. This meant they were taxable only on Belgian source income;
  • The employer was able to grant tax free allowances as reimbursement of costs proper to the employer (up to €11.250 or €29.750 for certain types of costs and unlimited reimbursement for certain types of special costs);
  • Application of the so-called “travel exclusion”: the remuneration that corresponds to professional workdays outside of Belgium was excluded from the taxable base.

Under the new expat tax regime:

  • The normal tax rules on tax residency will apply to expats and their families. In most cases this will mean they become tax residents and they are taxable on their worldwide income (under application of double tax treaties tax exemptions may apply). In specific situations the expat and his familiy will be considered non-tax resident, but they will need to prove their tax residency in their home country to the Belgian tax administration.
  • Tax free allowances of costs proper to the employer that can be paid on top of the contractual salary are now limited to 30% of the gross salary (however, these allowances are capped at €90,000 per year). Other allowances, covering special costs like school fees, house installation costs, etc. can be paid separately (subject to conditions and limitations).
    • However, it’s important to note that this 30% cost allowance and specific cost allowances cannot be used to reach the €75,000 salary threshold required to obtain and maintain the new special tax status.
  • Most importantly, should you change employer in Belgium, you will no longer automatically lose your expat status: your new employer can apply to continue your expat status if conditions continue to be met.

Our advice in this matter: For the expats who have been benefiting from the 1983 expat status up until now and who are not eligible for the new expat tax status, it is very important that they seek tax advice on the consequences of losing their special 1983 tax status. When they continue to work and live in Belgium, they will be treated as tax residents as from January 1st, 2024. This tax status implies a number of tax obligations and tax consequences to which they have not been exposed before.

As with any tax situation, it’s always best to receive professional and personalised advice. Be sure to reach out to an accredited tax lawyer who specialises in cross border and international employment. We’ll be happy to help.

Brigitte Lievens, tax lawyer

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Increase in Flat Rate Reimbursement

As costs related to homework are relatively small and difficult to prove, the social security authorities (RSZ/ONSS) and the tax authorities accept to estimate these costs on a lump sum basis. The office allowance is intended to cover, among other things, costs for heating, electricity, water, insurances, office supplies and refreshments.

The social security authorities have indicated in their intermediary administrative guidelines that the office allowance is indexed again. The maximum amount of 140.15 EUR, which applied from 01.06.2022 until 31.08.2022, has been increased to 142.95 EUR per month as of 01.09.2022.

The tax authorities had already indicated in their circular letter of 26.02.2021 that they would follow the amount of the office indemnity as determined by the social security authorities, as well as the evolution of this amount. The amount of 142.95 EUR is therefore exempt from social security contributions and taxes.

The amount of 142.95 EUR is a maximum amount. It is therefore not mandatory to grant this maximum amount, but you are free to increase the amount to 142.95 EUR per month as of 01.09.2022.

We would also like to remind you that a written agreement must be drawn up for teleworkers, in principle at the latest when the employee starts teleworking. In this agreement, specific mandatory provisions must be included such as the place where the telework will be performed, how the costs will be reimbursed, etc.

Other Indemnities for Working from Home

In addition to the office allowance, the employer can also reimburse the following costs on a lump sum basis:

  • 20 EUR per month if the employee uses his/her own internet connection for professional purposes.
  • 20 EUR per month if the employee uses his/her own computer for professional purposes.

OR

10 EUR per month (5 EUR per item) for the professional use of a personal second computer screen and printer/scanner (and this for a maximum of 3 years). Attention, this allowance cannot be combined with the lump sum of 20 EUR per month for the use of the own PC.

These indemnities have not been increased: the maximum amounts remain the same.

The lump sum amounts can of course only be granted if the office and internet costs are not yet reimbursed to the employee in another way.

Action point

Inform your Payroll Business Partner if you wish to increase the current lump-sum office allowance.

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Currently there is a draft program law pending in parliament which will provide this “update” by means of a new tax regime which will apply to “inbound taxpayers and inbound researchers”. As the law still needs to be voted, some changes may still be brought to the draft law during the debates in Parliament.

Employers who employ expats benefiting from the current special tax regime (or who are planning new expatriate hires) should monitor the changes and their impact very closely.

The draft program law uses following abbreviations for the new tax regime(s):

  • For inbound tax payers: BBIB/ RSII, in Dutch: Bijzonder Belastingstelsel voor Ingekomen Belastingplichtigen, in French: Régime Spécial d’Imposition pour les Impatriés;
  • For inbound researchers: BBIO/RSICI, in Dutch: Bijzonder Belastingstelsel voor Ingekomen Onderzoekers, in French: Régime Spécial d’Imposition pour les Chercheurs Impatriés.

As the scope of this article does not allow us to go into all (technical) details of the new regime, we will only highlight the most important changes comparing them to the current special tax regime.

The current special tax regime for foreign executives, known as the “expat status”, has following (well known) characteristics and interesting tax benefits:

  • Belgian nationals are not eligible for the expat status (even if they have double nationality or even when they have lived abroad for a (very) long time);
  • Not-for-profit organisations (VZW/ASBL) are excluded from the regime;
  • Expats who have obtained the special status (and their family) are deemed to be non-residents, even if they live in Belgium; that resulted in the non-application of double tax treaties if the expat was no longer considered a tax resident in his home country;
  • No time limit on the expat status as long as the conditions are continuously fulfilled;
  • A change of employer in Belgium resulted in the loss of the expat tax status (except in special situations of intra-group switches);
  • There are no requirements in terms of salary minimum or diploma as long as it concerned an “executive” function, the decision was based on an analysis of each case at hand;
  • Eligible to the regime are key functions/executives and researchers;
  • The expat is entitled to three major tax benefits:
    • As a non-resident, he is only taxable on Belgian source income;
    • Tax free allowances as reimbursement of costs proper to the employer (up to €11.250 or €29.750 for certain types of costs; unlimited reimbursement for certain types of special costs);
    • Exclusion from the taxable base of that part of the remuneration that corresponds to professional workdays outside of Belgium.

Under the new special tax regime for inbound tax payers and inbound researchers, which will now have a legal basis, the most important features are:

  • Nationality does not have an influence anymore on the eligibility under the new regime, though, a number of conditions are inserted to be eligible:
    • During 60 months (5 years) prior to application for the new expat regime
      • one should not have been considered a Belgian tax resident;
      • one should not have lived within 150km from the Belgian border;
      • one should not have been subject to Belgian non-resident tax in respect of Belgian source professional income;
    • Not-for-profit organisations (VZW/ASBL) are no longer excluded from the regime;
    • Expats who have obtained the expat status (and their family) will be subject to the normal rules on tax residency. An expat who lives in Belgium with his family will therefore normally be treated as tax resident. I the home state continues to consider the expat (and his family) as tax resident, Belgium will treat them as tax non-resident upon the condition of providing an annual tax residency attestation; this means that double tax treaties will have full application under the new regime;
    • There is a time limit on the new expat status: there is an initial period of 5 years, with a possibility for an extension with 3 years (maximum of 8 years);
    • A change of employer in Belgium will no longer automatically result in the loss of the expat status; the new employer will have the possibility to also make an application for the expat status, but there will be no new 5-year term (as the eligibility starts as from the first employment date in Belgium, even with a change of employer, this date remains the anchor point);
    • Eligible to the regime are still key functions/executives and researchers, though the new regime provides for some minimum salary requirements and diploma conditions:
      • As mentioned above the new regime is a system with two sub-regimes: “inbound taxpayers” and “inbound researchers”:
        • BBIB/ RSII – for inbound taxpayers (employees or company directors):
          • the expat must be (i) recruited directly from outside Belgium by a

Belgian company, by the Belgian branch of a foreign company or a not-for-profit organisation, or  (ii) seconded by a foreign company which is part of a multinational group to a Belgian company or Belgian branch of a company within that group, or to a non-for-profit organization;

  • a minimum of €75.000 gross compensation on yearly basis (excl. of the 30% cost allowance – see further);
  • BBIO/RSICI – for researchers (only accessible for employees):
    • the expat must be recruited directly from outside Belgium or seconded to Belgium (see above);
    • no minimum salary level;
    • the expat needs to qualify as researcher:
      • alone or in group, at least 80% of working time is research time (as defined in the law);
      • qualifying diploma or at least 10 years equivalent experience (diploma= doctor or master-level defined science domains).

 

  • The expat is entitled to following tax benefits under the new expat status:
    • Tax free allowances as reimbursement of costs proper to the employer up to 30% of the gross salary (capped at €90.000, possibly indexed as from 2024) paid on top of the contractual salary; the employer’s engagement to use the new 30% system to reimburse costs can thus not be used to reach the €75.000 threshold;
    • A system of additional reimbursement for special costs remains: it concerns costs of moving, cost of decoration and organisation of one’s home and school fees (subject to conditions and with certain limitations). Also these reimbursements are not taken into consideration to reach the salary threshold.

It very important to highlight also the new procedure to obtain the new special expat tax regime and the envisaged date of entry into force.

  • Under the new regime the application will need to be filed electronically within three months after the start of the qualifying employment (today: 6 months) and the tax authorities will need to make a decision within 3 months (in practice often up to 12 months currently).
  • The draft program law has an entry into force date on January 1st, 2022! This is real soon! Eligible employees, directors and researchers starting employment as from that date will fall under the scope of application of the new law if they meet the conditions.

For expats enjoying the tax benefits of the current expat status a complex set of transitional measures will be available. On the basis of “opt-in” or “opt-out” possibilities, the files of the expats enjoying the current special tax regime should be analysed and decisions will need to be made:

  • If on January 1st, 2022 one is benefiting from the current expat status for a period of maximum 5 years and one meets the criteria for the new regime (in a retroactive consideration), an application for the new regime can be filed and such will need to be done ultimately on July 31st, 2022. The new regime can then be applied – as from January 1st, 2022 – for the “remaining period” of 5 (or 8) years. If however upon such a request the answer is negative, the new regime is not acquired, but a transitional measure will allow for the old regime to remain applicable for 2 more years.
  • If on January 1st, 2022 one is benefiting from the current expat status and does not meet the criteria for the new regime, there will be a transition period of 2 years. After these 2 years, the old regime ceases to be applied (whilst also the new regime is not acquired).

Foreign executives currently benefiting from the special tax regime for expatriates and their employers will need to closely monitor on a case-by-case basis the consequences of all the changes brought to the Belgian special tax regime for expats.

At the moment this article was written it was still unclear how the tax-free allowances for costs proper to the employment will be treated for social security purposes. This topic is not inserted in the draft program law and will need separate legislative work if an exemption for social security is to be added to the new tax regime for expats.

 

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Although there appears to be light at the end of the tunnel, there are still many organisations who find themselves in difficulties due to the ongoing crisis. Those in crisis can still count on the Replacement Income, but under different conditions. Liantis social security fund (sociaal verzekeringsfonds/caisse d’assurances sociales) offers a clear overview of the updated support measures. They also offer a free online tool that will show you what, if any, financial support you are entitled to in 2021 with a few simple clicks.

3 Pillars of Replacement Income

Since January 2021, the Replacement Income (overbruggingsrecht / droit passerelle) comprises three pillars. These apply until June 2021.

Double Replacement Income if Compulsorily Closed or Dependent on a Compulsorily Closed Sector
Is your business compulsorily closed for at least one day in a particular month, or does it depend on a sector that is compulsorily closed? Then you qualify for a double replacement income for that month.
Application: For the months of January, February and March 2021: submit your application via My Liantis if you are a Liantis client, or contact your own social security fund.

Payment: On Fridays Liantis pays the benefits that were applied for the week before. Your benefit will be in your account within three working days. Benefits for the month of March 2021 are paid as of 2 April 2021.

Read more about the replacement income for those who are compulsorily closed or dependent on a compulsorily closed sector

Crisis Replacement Income in case of Substantial Decrease in Turnover
Are you still exercising your self-employed activity, but has your turnover fallen by at least 40%? In that case, apply for the crisis transitional right in the event of a substantial decrease in turnover. The sector in which you are active plays no role in this benefit.

Application: For the months of January, February and March 2021: You can submit your application via My Liantis if you are a Liantis client, or contact your own social security fund.

Payment: Benefits will be paid as of 2 April 2021.

Read more about the crisis replacement income in the event of a substantial fall in turnover

Crisis Replacement Income in case of Quarantine or Child Care
Do you have to interrupt your activities completely for at least seven consecutive calendar days because you have to go into quarantine? Or can you not work for at least seven days because your child cannot attend the day-care centre or school due to corona measures? In that case, you are entitled to crisis replacement income.

Application: For the months of January, February, March and April 2021: apply via My Liantis or via your own social security fund.

Payment: The first payment for the month of April 2021 will be made on 1 May 2021 at the earliest.

Read more about the crisis replacement income in the event of quarantine or taking care of a child

Did you know…
∞ You can combine replacement incomes with another professional activity as an employee or civil servant almost without restrictions?
∞ If you enjoy the replacement income, you may continue to receive your salary as a business manager, director or working partner?

Applying for Replacement Income
The easiest way to submit your application and have it processed is via the customer portal My Liantis (section ‘my social status’). If you don’t have access to My Liantis yet, you can register at liantis.be/myliantis using your eID or itsme app. A username will be created automatically based on your e-mail address. Is this not possible? Then you can always go to the Liantis support page with your questions.

They will inform you of their decision on the Friday following the week of your request. Still have questions? Then contact your personal customer advisor.

Application Deadlines
∞ For the months January to March 2021: at the latest 30 September 2021.
∞ For the months of April to June 2021: no later than 31 December 2021.

Still want to apply for Replacement Income for 2020? This is still possible for the second semester of 2020.

∞ For the months of July through September 2020: at the latest on 31 March 2021.
∞ For the months of October through December 2020: at the latest on 30 June 2021.

Crisis Replacement Income before January 2021
In 2020, there were two forms of crisis Replacement Income, with an equally high benefit amount:

1. The Crisis Replacement Income to support self-employed persons who were forced to close their business or who were mainly dependent on compulsory closed sectors.

∞ If you were compulsorily closed directly during the months of October, November or December 2020 and did not carry out any self-employed activity other than click & collect or take-away: double benefit.

∞ If you were compulsorily closed in October, November or December 2020 and exercised other self-employed activities besides click & collect or take-away: no entitlement to the double benefit, but possibly the single Relance Benefit.

∞ Were you dependent on a compulsory closed sector in October, November or December 2020 and did you decide to completely interrupt your activities: a double benefit.

∞ Were you dependent on a compulsory closed sector in October, November or December 2020, but you continued to work (e.g. to serve private clients): a single crisis Replacement Income.

Take a look at their page about the double Replacement Income for more information.

2. If your business was not closed by force and you were not dependent on a compulsory closed sector, you could count on the Relance Benefit to support your restart until December 2020. This form of Replacement Income was granted to self-employed persons who were closed on 3 May 2020 or on whom the measures had the same impact. There’s a separate webpage with more information on the relance benefit. Since January 2021, this form of replacement income has been replaced by the Crisis Replacement Income due to a Drop in Turnover.

As well as the federal support measures there are a number of regional measures, which we have bundled in a handy overview that answers the following questions:

■ You belong to a direct compulsory closed sector and you do not carry out any other independent activities besides click&collect or take-away.

■ You are under a direct obligation to close and you engage in other self-employed activities besides click & collect or take-away.

■ You are dependent on compulsory closed sectors without complete interruption.

■ Crisis bridging right because of compulsory closure or because you are dependent on a compulsory closed sector: for which self-employed persons?

Republished with permission by Liantis social security fund.

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Deferral of Payment and Guarantees

The banks and the government are very much aware of the difficult situation in which both companies and individuals now find themselves. They want to support and financially support them as much as possible. In this way, they have every opportunity to get through this turbulent period as well as possible and to quickly find a stable financial situation as soon as the corona crisis has subsided.

Together with the Minister of Finance, and with the support of the National Bank of Belgium, the sector has worked out an agreement for viable companies, based on two pillars:

■ The financial sector is committed to viable businesses and the self-employed as well as mortgage borrowers who are at risk of payment problems by postponing the corona crisis until 30 September 2020, and this without charging any costs.

■ The federal government will activate a guarantee scheme for all new loans and credit lines with a maximum term of 12 months, granted by banks to viable non-financial businesses and the self-employed.
These support measures are intended to provide financial flexibility in order to to enable taxpayers to overcome temporary financial difficulties.

Quick Overview

a. Which companies?
Natural or legal persons with an enterprise number (ECB/KBO):
∞ regardless of their sector of activity
∞ who are experiencing financial difficulties as a result of the spread of the coronavirus and can demonstrate this (e.g., a decrease in the number of business, a significant drop in orders and/or reservations, chain reaction effects with partner companies, etc.). Support measures may not be granted to undertakings which, regardless of coronavirus, experience structural payment problems.

b. What debts?
∞ Withholding tax (bedrijfsvoorheffing / précompte professionel)
∞ VAT (payment deadlines are extended interest free)
∞ Personal income tax
∞ Corporate income tax
∞ Taxation of legal persons

c. What is the timeframe?
∞ Application to be submitted no later than 30 June 2020

d. What measures?
∞ Payment plan
∞ Exemption from interest on arrears
∞ Remission of fines for non-payment

e. What conditions?
∞ Compliance with the conditions for filing declarations
∞ debts must not result from fraud

Support measures will be withdrawn in the event of:
∞ failure to comply with the payment plan granted, unless the debtor takes
timely contact with the administration
∞ occurrence of collective insolvency proceedings (bankruptcy, judicial reorganisation, …)

f. What steps?
Contact your bookkeeper for further details and the links to the correct documents for your region.

Social Security Contributions

Option 1. Postponement of Payment

Entrepreneurs in main occupation and assisting spouses may apply for deferral of payment of 1 year if they experience difficulties due to the coronavirus. You do not pay any surcharges or interest (in case of timely payment in 2021) and your rights will continue to accrue.

Which Quarters:
∞ 1st quarter 2020: payment date postponed from 31 March 2020 to 31 March 2021
∞ 2nd quarter 2020: payment date postponed from 30 June 2020 to 30 June 2021

Deadline Request:
Applications before 15/06/2020 for quarter 1
Applications before 15/06/2020 for quarter 2

How to apply:
Send your bookkeeper an e-mail with the following details and request a postponement:
– Surname and first name
– Place of residence
– Name and seat of your company
– Company number
– Professional activity in which you are active

Please note: direct debit customers must notify the bank themselves. If they fail to do so, social security contributions will still be credited in the event of postponement of payment.

The measure concerning the postponement by one year of the payment of social security contributions for the first two quarters of 2020, as well as the regularisation contributions due on 31 March 2020, is extended to ALL categories of self-employed workers (i.e. not only applicable to self-employed workers in their main profession and assisting spouses). In view of the economic impact of the emergency measures to limit the spread of the coronavirus COVID-19, the application for deferral of the first quarter 2020 contributions may be submitted until 15 June 2020.

Option 2: Reduction of Social Security Contribution

You can have your social contribution reduced to the legal thresholds when your income is reduced. Overview Thresholds: https://www.xerius.be/nl-be/zelfstandigen/sociale-zekerheid/drempelbedragen

Option 3: Temporary Financial Difficulties Exemption

You can request an exemption due to ‘temporary financial difficulties’ for the social security contributions of the 1st and 2nd quarter of 2020. If you want to apply for a waiver of your fees for these two quarters, we recommend that you do so before you receive the statement for the second quarter. An application for future quarters is not possible. This is only available to the full time self-employed and their and assisting spouses in the maxi statute.

If you receive a positive advice, you will not build up any pension rights for these two quarters (this is provisional and can be adjusted due to coronavirus), although your social security (health care) status will not be affected. Also keep in mind that you will have to have been active in this statute for at least 4 quarters. This too may be relaxed, but this is not yet clear.

For the time being, there are no simplified application forms and you have two options: submit directly to the government or as a customer of Xerius via this form. If you have a different social secretariat, please check their website for the relevant paperwork.

However, we are in favour of applying for a postponement of payment first. You can always apply for the exemption later (before the end of 2020).

Replacement Income
(overbruggingsrecht or droit passerelle)

For whom?
YES: ALL self-employed persons in main profession and assisting spouses in maxi statute.
NOT: Self-employed as a secondary profession, pensioners, student self-employed and self-employed persons with equal secondary profession.

Please note: this is considered as a replacement income and cannot be combined with any other benefit (during this break you may also NOT start working as an employee).
Starting date of the entrepreneur does not matter and it is also available to sole proprietors and company managers. The sector in which they are active does not matter either.

The Replacement Income can be combined with the Flemish Nuisance Allowance. If you want to take advantage of this, you must apply for it yourself. Replacement Income is paid out by your social insurance fund (Xerius, Acerta, Liantis, …).

Amount of Payment:
∞ Active in the hospitality industry (even if you do not close your business completely and still offer takeaway meals and close your business for at least one day).

∞ Other sectors (where you are obliged to close your business completely or partially due to the corona virus) and interrupt your activities for at least 7 consecutive days.

∞ Other sectors that close down as a precaution, or because they have too few customers.

They receive a benefit of 1,291.69 euros (or 1,614.10 euros in case of dependants) for either March or April, depending on which month you interrupt your activities for at least 7 consecutive days. Are your activities interrupted for at least 7 consecutive days in both months? Then you can get a replacement income in both March and April.

How to apply and when can you expect your payment?
Option 1: Send an e-mail to your social insurance fund and mention the following in the e-mail:
o Apply for a replacement income because of corona virus,
o your name, first name and place of residence,
o your customer number, which you will find on your statement or on the back of your identity card (your national registration number is also your customer number).
o your company number and the name and registered office of your company,
o the sector in which you are active and briefly outline the reason(s) why you had to interrupt the activities as a result of the coronavirus.
o the period of interruption: the date that you stop your activities and possibly the date that you resume your activities (the latter date is currently not yet estimable for most people, so it is not necessary to indicate this).
o the bank account number to which the payment may be made.

Also answer the following questions in your e-mail:
o Do you have at least one dependant (wife, cohabitant, parent, grandparent, child,…)?
o Do you exercise a professional activity during the cessation or interruption of your self-employed activity? Or are you still a mandatary or working partner in another company?
o Do you receive a replacement income during the period of interruption?

Option 2: Fill in the simplified application form for ‘coronavirus’ replacement income, sign and send it to your social insurance fund.

Please note: Application in both options must be done by yourself. Your accountant of course will assist you if you have any questions about this.

Hindrance Premium
(hinderpremie or prime unique)

The Hindrance Premium is determined on the basis of the establishment unit of the entrepreneur and applies to forced closures of physical locations (excl. pick-up). There is only a premium of 4,000 euros. The premium of 2,000 euros has been abolished in Flanders. Brussels and Wallonia apply different rules (for the time being) – see further down.

FLANDERS
– 1 establishment:
o 4,000 euros per forced closure and only for physical locations (excl. collection) – proof by declaration on honour
o Pay at least as main professional or 1 FTE as salary

– Multiple locations:
o You receive the Hindrance Premium for a maximum of 5 locations.
o Paying at least as a main professional or 1 FTE as an employee.

The Flemish Hindrance Premium can be applied for up to and including May 5, so you certainly have plenty of time to submit your application.

Download the various documents from the ABRA website.
Apply for the Flemish Hindrance Allowance with this link.

What do you need to have at hand?
∞ Your e-ID and your e-ID pin code (or your smartphone if you log on via itsme).
∞ An active Belgian account number of your company on which the premium can be paid (in IBAN format, i.e. consisting of 16 characters starting with BE,
followed by 2 digits and then the 12 digits of your account number)
∞ Check your normal opening days, as they were before the coronavirus measures
∞ Main or secondary profession
∞ In case of a secondary occupation: do you pay social security contributions like a main occupation? Only auxiliary professionals who pay the minimum contributions of a main professional are eligible.
∞ The website address (url) of your company if you have one
∞ Do you have multiple branches? Be sure to select the right branch for which you are applying for the premium.

Tips:
∞ This premium is tax exempt.
∞ The further promotion of webshops has NO influence on the granting of the premium when a physical location is present.
∞ The Belfius card reader and probably also at other banks can be used as an E-ID reader.
∞ If you do not have an active branch in the KBO or if the position(s) is (are) not correct, you cannot apply for a nuisance bonus (this can possibly still be rectified via the Ondernemingsloket).

WALLONIA
a. Tax freeze in Wallonia
For its part, the Walloon government has frozen all regional taxes related to the number of days that the businesses are closed, prorated to the number of days they are closed.

b. Closure Compensation
Compensation of 5,000 euros per closed company in Wallonia The Walloon Government grants a lump-sum compensation of 5,000 euros for each business that has closed or ceased operations during the period of containment. The sectors concerned are horeca, accommodation, travel agencies and reservation services, retail, as well as travel and provision of services (e.g. beauticians). An indemnity of 2,500 euros is also provided for companies with the activity is restricted, including hairdressers.

■ The information number 1890 remains available for entrepreneurs and Walloon independents.

BRUSSELS
The Brussels government, for its part, has decided to support the treasury of the companies affected through the granting of public guarantees on bank loans for a total of EUR 20 million. It also intends to strengthen support for companies in difficulty via the Centre for Enterprises in Difficulty (CED). Simplification and administrative benevolence towards the companies and businesses affected as well as the anticipation of the treatment and liquidation of economic aid to priority destination for the Horeca, cultural, hotel and event sectors are also applicable.

■ The information number 1819 centralizes all information for companies and entrepreneurs in Brussels.

Compensation Premium Entrepreneurs

As of last week, the Flemish government is providing an additional support measure for entrepreneurs who are not obliged to close down (and therefore cannot apply in conjunction with the Nuisance Premium), but who are still experiencing a large loss of turnover due to the Corona crisis. This is the Compensation Premium. They are still working on the application and correct modalities, for now you can find the latest information on the VLAIO website.

This new premium is aimed at companies and their suppliers who are allowed to continue working or shops that remain open but have a large loss of sales due to the restrictive measures, which can show that they have a loss of sales of -60% in the period between 15 March 2020 and 30 April compared to the same period last year.

For start-ups, a decrease in turnover of -60% compared to the financial plan laid down will be taken into account. NPOs are also eligible, provided that at least one person is employed full time.

Examples: companies in the events sector that also employ many freelancers; (para-) medical professions such as physiotherapists, dentists, psychologists or speech therapists who are only allowed to carry out urgent interventions; companies that provide essential food services such as praline shops or liquor traders, but still suffer a heavy loss of turnover due to lack of passage or tourists; painters or plumbers who are only allowed to carry out urgent repair work; farmers who work specifically for hotel and catering customers, etc….

Amount of Aid
∞ The aid includes a one-off compensation premium of €3,000;
∞ There is a maximum of 5 premiums per company if there are more than one operating seat per company.
∞ Self-employed persons in a secondary occupation, who pay social security contributions as a self-employed person in their main occupation due to the level of income, can also receive the compensation premium of € 3,000;
∞ Self-employed persons in secondary occupation who have an income between € 6,996.89 and € 13,993.78 can claim a compensation premium of € 1,500. This premium also applies to self-employed persons in a secondary occupation who are obliged to close, but does not apply to self-employed persons in a secondary occupation who combine this with a job as an employee of 80% or more.

More information is not yet available at time of publication and so we advise you to refer to the VLAIO website where the application will shortly be made available.

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Temporary Unemployment

Under certain conditions, you can apply for temporary unemployment for the employees you can no longer employ full or part time due to the Corona crisis. By introducing this temporary unemployment benefit, you temporarily suspend the employee’s employment contract. The Belgian government has introduced a simplified procedure, which originally ran until 6 April but has since been extended until 31 May 2020. Please note that this is only one measure taken by the Belgian government and that there are still measures to which you may have recourse. Furthermore, we cannot stress enough that the Belgian government regularly adapts these measures.

Procedure

Not every employer can claim this temporary unemployment. Only those employers who are directly affected by Covid-19, as a result of which the employees can no longer perform their duties at all or only partially, can make use of this specific procedure. Examples are: a shop has been closed, sales representatives can no longer visit customers and do not have enough tasks to perform at home, orders are no longer coming in,…

Not all employment contracts should be suspended. Only those employees who cannot work more or less because of their position are eligible for this. If, as an employer, you wish to apply for temporary unemployment, you can do so via a simplified procedure until 31 May 2020. This means that you let your Payroll Business Partner know which days the employees will work and which days they will be unemployed. Pro-Pay takes care of the necessary electronic declaration of these days of unemployment so that the NEO knows to which benefit the employee is entitled.

It is possible to suspend the employment contracts either completely (the employee no longer works) or partially (the employee still works one or more days per week). If partial unemployment is chosen, the employer determines how many days the employee can still work. The employees do not have to agree to this. Of course, they do have to be informed about the days they still have to work and which days they will be unemployed. This notification to the employees can take any form, an e-mail may be sufficient in some cases.

The Benefit

Workers who are temporarily unemployed must contact either their trade union (if they are affiliated to it) or the “Unemployment benefits fund” in order to open a file and obtain unemployment benefits. You can open a file at the “Unemployment benefits fund” online. The union or the help fund will then pay the unemployment benefits into the worker’s bank account on a monthly basis. Unemployment benefits amount to 70% of the gross monthly salary. However, the gross wage is limited to EUR 2,754.76. In addition, the unemployment office pays EUR 5.63 per day of unemployment. On both amounts 26.75% withholding tax is withheld.

In some sectors, there is an additional obligation to pay a supplement on top of this unemployment benefit. In addition, it is possible to pay a supplement voluntarily. This supplement can be granted free of social security contributions on condition that the total of the unemployment benefit + the supplement(s) does not exceed the taxable salary that the employee would have earned if he had worked.

If the employees are partially unemployed, they receive their normal salary for the days they work. Temporary unemployment days will be assimilated for pension purposes. Currently, there is no equivalence for the accrual of holidays and holiday pay, but according to various press releases, there would be a legislative initiative to put this on an equal footing.

With regard to the assimilation of end-of-year bonuses and other benefits granted at sectoral level, it will be necessary to examine what has been agreed within the Joint Committee. It cannot be ruled out that agreements will still be concluded in the sectors to assimilate this exceptional period to effective performance if this was not already the case.

Attention: if the employees only work at home and previously received an expense allowance because they had a mobile function, this expense allowance can no longer be granted. Instead, the government has increased the monthly reimbursement for office expenses (see further down).

Withholding Tax

The authorities grant a two-month deferment of payment of the withholding tax on earned income.
• Payment period withholding tax on earnings February 2020 extended to May 13, 2020
• Payment period withholding tax on earnings March 2020 extended to June 15, 2020
• Payment period withholding tax on earnings April 2020 extended to July 15, 2020
• Payment period withholding tax on earnings 1st quarter 2020 extended to June 15, 2020

In addition to this deferral, you can also apply to receive an exemption from default interest or remission of fines, or request a repayment plan. Such an application must be submitted before June 30, 2020. Note: this does not happen automatically! Contact your Payroll Business Partner for assistance.

Social Security

As far as the employer’s contributions for social security are concerned, different support measures apply. Companies that are closed on government order can benefit from an automatic deferment of payment of social security contributions until December 15, 2020.

Companies that are not obliged to close but that suffer from the Corona crisis economically can apply for a deferment of payment of social security contributions until December 15, 2020 provided they submit a motivated application file with the social security authorities. Apart from the deferment of payment, an amicable payment plan is another option offered by the NSSO to companies in difficulties.

Office Costs and NSSO

Employees who work from home on a structural and regular basis can receive compensation from their employer for this. Since the costs related to working from home are relatively small and difficult to prove, the NSSO accepts that these costs are estimated on a flat-rate basis. For a number of costs, including the compensation for homeworking, the NSSO itself has fixed lump sums, as well as the conditions that apply to the granting of these lump sums.

The fixed compensation that the NSSO uses for office costs covers the costs of heating, electricity, small office equipment, insurances,… The allowance may be granted to employees who do not have a workplace with the employer or – if they do have a workplace with the employer – when their position shows that they work from home on a regular basis.

Employees who previously did not work from home, but are now forced to do so by the Covid-19 measures, can also be granted this compensation without the employer having to conclude a formal teleworking agreement with the employee. This is also possible if the employee works partly from home and is temporarily unemployed.

In addition to this maximum amount of €129.48, the employer can also compensate the following matters on a lump-sum basis:
∞ €20 per month if the employee uses his/her own PC for professional purposes;
∞ €20 per month if the employee uses his/her private internet connection for professional purposes.

Of course, these lump sums can only be granted if the office and internet costs are not reimbursed to the employee in any other way. Please note that the NSSO also uses other fixed amounts for forms of teleworking and homeworking besides the fixed amount for office costs, which are not discussed in this newsletter.

The Tax Authorities

The reimbursement of €129.48 for office expenses can be granted free of social security contributions if the conditions for granting the allowance have been met. The tax authorities do not have a similar official position regarding a fixed amount for office costs, but often follow the position of the NSSO on this matter.

However, if you want certainty from a tax point of view about the application of a fixed amount for the reimbursement of office costs, a ruling must be requested from the tax administration. The ruling service of the tax authorities has provided a simplified procedure specifically for obtaining a ruling for the reimbursement of telework during the corona crisis.

www.propay.be/en

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Up until then, Belgian employers did not have a tax withholding or reporting obligation for remuneration granted by a foreign parent or affiliated company, if the Belgian employer was not involved in granting that remuneration. The only exception to this rule was the obligation to report stock options meeting the conditions of the Stock Option Law of March 26, 1999. The employee, however, was obliged to report the foreign income in his personal tax return.

The current introduction of the withholding obligation with the taxes being paid at source through payroll is part of the battle against social and tax fraud. Where in the past, Belgian employers sometimes weren’t even aware of foreign remuneration (mostly equity) being granted to their employees by a foreign affiliated company, more communication between the Belgian employer and its foreign affiliated companies will be necessary in the future.

Withholding Obligations

Starting retroactively on March 1, 2019, all taxable remuneration paid by foreign parent companies and/or affiliates will need to be taxed through payroll as it becomes subject to withholding taxes. Withholding taxes are to be declared on a monthly basis and to be paid on a monthly or a quarterly basis. Given the fact that the Law has entered into force on March 1, 2019, there is no withholding obligation for the foreign remuneration granted in January and February 2019. Please note however, that the taxable benefits of these months will need to be reported in the 2019 tax forms that need to be submitted to the Belgian tax authorities before March 1, 2020.

Reporting Obligations

All remuneration paid by foreign parent companies and/or affiliates to Belgian employees will need to be reported by the Belgian employer to whom the foreign company is linked. The reporting will take place via the yearly tax form 281. This form includes the taxable earnings of employees/directors. The employer is obliged to provide the form to his staff, that should use the details mentioned on the form to file their tax returns.

Belgian Social Security on Foreign Remuneration

As a general principle in the Belgian legislation, social charges are due on salary. One of the conditions that needs to be fulfilled for a benefit to be considered as salary is the fact that the benefit needs to be chargeable to the employer. This condition is laid down in the Act of 1965 on the protection of salary. Up to the 3rd quarter of 2018, the Belgian social security authorities believed that benefits were not “chargeable to the employer”, if the employee could not claim the benefit from the Belgian employer in a financial or a legal way (e.g. because the right to the benefit was contractually agreed upon). In other words: if the advantage was granted to the employee by a foreign affiliated company without any intervention of the Belgian employer, no social charges were due.

However, according to the administrative instructions of the National Social Security Office (NSSO) issued in the 3rd quarter of 2018, social security contributions are now due on all benefits that relate to the work performed by the employee in the execution of his/her employment contract with the employer or that relate to the function of the employee carried out for the employer. This principle applies even without any intervention of the (Belgian) employer in the payment/grant of the benefit.

According to most of the Belgian authors specialized in the matter, this point of view of the NSSO is too much, as it interferes with the definition and notion of salary as laid down in the Act of 1965 on the protection of salary. However, as this new point of view has been published in its recent instructions, chances are that the NSSO will enforce its point of view and that we’ll have to wait for the first court cases before any changes might be introduced.

Next Steps

■ Belgian employers should inform their foreign headquarters or affiliated companies of the change in the Belgian regulations even if they are currently not aware of any remuneration granted or paid to their Belgian employees by a foreign affiliated company;
■ Employers should inform Pro‐Pay or their payroll office of the foreign remuneration that will be subject to withholding taxes. In case of doubt about the taxability of certain remuneration or the timing of taxation, employers should seek the advice of a specialized tax consultant;
■ Employers need to inform Pro‐Pay or their payroll office of the remuneration paid by a foreign linked company to the Belgian employees in January and February 2019, in order to ensure correct reporting on the tax form 281.

About Pro‐Pay
Pro‐Pay is an independent payroll provider in Belgium offering services to Belgian companies and international companies with employees in Belgium. Find out more at: www.propay.be/en/

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There are a number of types of insurance coverage that you are legally required to take out as a business, such as occupational accidents and general civil liability. Then there are the additional covers which will differ per organisation, and are dependent on risk. At the very least, you need a good general liability insurance to insure against all cases of non-contractual damage to third parties. How extensive it should be will depend on the type of business and the activity.

Spill water on a client’s laptop and it’s covered by your general liability insurance. If you’re serving snacks at an event and one of the suppliers has suffered from a salmonella outbreak, they’ll want to have product liability coverage. In addition to a good fire insurance, consequential loss insurance is also useful to compensate for turnover and loss of profit immediately after the fire or water damage.

For intellectual and liberal professions, contractual professional liability is often added. When there are employees, an occupational accident insurance policy is mandatory and every company car requires motor insurance. You can supplement this with comprehensive insurance and assistance.

GDPR and data processing agreements can hold large contractual liabilities, so what if you lose a client’s documents and accidentally disclose private data? Private liability insurance can mean the difference between bankruptcy and the survival of your business. After all, professional liability does not always require an error to have been made, simply failing a contractual obligation can be sufficient to trigger your contractual liability with a client.

Similarly, cyber crime is on the rise and a sudden attack by ransomware can see you held liable by your clients for not meeting your contractual obligations.

It can be interesting to insure the directors of the company under a directors’ liability insurance. An inexpensive insurance policy, it guarantees legal representation and assistance when the business owner (accidentally) causes damage to his business or a staff member. Under the new company law this is seen as not only a business accident but also falls under your personal liability because you are at fault. A business owner can, if he is not insured, lose everything. Not only is his business declared bankrupt, but his house can be taken too. We’ve seen it happen before.

Succinctly put: insurances are a form of precaution. They require you to take a closer look at all your possible risks so you can try to eliminate or reduce them. You transfer the residual risks to an insurance company in exchange for payment of a premium. The better your own precautions, the cheaper your insurance will be. So critically assess your risks and get advice from a specialist insurance broker.

“A good insurance package is not just an accumulation of policies. One policy must strengthen the other, not weaken it. Ask for guidance from an independent broker who can guide you through your risk assessments.” – Filip Declerq, Expat & Co

It’s hugely important that all the insurance policies included in a package are aligned. One policy must strengthen the other, not weaken it. Imagine your insurances for civil liability and legal assistance are under the same company. Now let’s suppose you have a civil liability car insurance with company A and company A is the market leader in Belgium. If you cause an accident, there is a good chance that the person involved is with the same insurance company. This creates a conflict of interest. Company A must represent both persons, without the control of a counter company. The tendency to compensate the customer with the smallest damage could be high.

If you’re the party who has suffered the greatest damage and are convinced that you are in your right, you can lodge an objection by appealing through legal aid. But, if that legal assistance is with Company A again, you have a problem. The legal assistance at A thus weakens the civil liability guarantee. It’s therefore best to take out legal assistance insurance with an independent legal assistance company. Of course, the disadvantage here is the cost. Separate legal assistance costs much more, but you are guaranteed that your files will always be handled correctly.

An example of reinforcement would be if your consequential loss insurance is with the same company as your fire insurance. Suppose a fire starts in your office, requiring you to close it for a longer period of time and on top of that a discussion has arisen with the damage expert. If you place the business damage insurance policy with the same company, the expertise becomes more urgent to the covering insurer. The longer the expert discusses details, the longer your company will suffer consequential damage. As a result, the insurance company will have to pay more for the loss of profit and the rental of replacement offices. It is therefore in the insurer’s own interest to reimburse you as quickly and effectively as possible.

“Focus on risk management and apply prevention measures.” – Alain Voets, Concordia Insurances

Of course, there is no insurance to help reduce insurance claims. A company can take measures, such as working with a prevention advisor, to reduce and manage the risk of, for example, accidents in the workplace. With less accidents, you suffer less damages and less damages helps lower your premium. Companies that work with machines, for example, receive additional conditions imposed by insurers in order to limit certain risks. After a year, these are revised and adjusted if necessary to ensure that the premium doesn’t need to be increased. You might also offer employees an incentive if there are less accidents than the previous year; this makes staff more alert for accidents.

“On the one hand there is the element of chance, but on the other there are risks that you can assess and limit. If you’re organising an event or managing a project from A to Z, there are a myriad of things that can go wrong, before, during and after the event. ” – Alain Voets, Concordia

The number of things that can go wrong at any time are endless, but when we find ourselves needing to claim, we’re often quick to blame the insurer when we don’t receive the compensation (we think) we deserve. However, it’s important to note that this isn’t always due to the insurance company, but may also be attributed to the customer or the broker.

When things do go wrong with the insurer this is often to do with conflicts of interest, where the insurance company decides to pay out the lesser of two claims as previously discussed. A form of abuse of power then plays a role. The insurance company has an entire army of good lawyers at its fingertips, which the client usually doesn’t.

“Some customers try to cheat the insurer by not disclosing all the facts, but they usually end up deceiving themselves.” – Filip Declerq, Expat & Co

Things can go wrong from the customer’s side when they are careless or don’t receive specialist guidance by their broker. It’s easy to forget something, and accidents are quick to happen. If something happens, and you are not, or not sufficiently insured, you pay for the costs yourself. You cannot blame your insurer for your carelessness, negligence or oblivion, irregular control or follow-up.

Incomplete transparency can be contributed to the customer. Some customers try to cheat the insurance company by not disclosing all the facts. But they usually end up deceiving themselves, because insurers leave little to chance. The same applies for brokers. They too sometimes forget something. Nothing human is alien to them. But they do have professional liability insurance for this. If damage is caused by their fault or negligence, the client will be reimbursed under their professional liability insurance.

“The onus is on clients to inform us of changes. If you’ve bought a new car, you need to let us know so we can insure it. Companies evolve and communication between the insurer and insuree is hugely important.” Laurent Martin, ALLIA Insurance

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SOME USEFUL TIPS TO ENSURE A SUCCESSFUL CLAIM RESOLUTION

∞ Submit your claims in time
Many contracts have a limited time span after the accident or incident to submit your claim. If that time is up, the insurance company does not have to reimburse you.

∞ Be honest, correct and complete
Make sure your first version of the facts is always the correct version. People who change their version afterwards, when they feel things aren’t turning out the way they want, are always considered suspicious. Companies have the right to call in detectives to find out the truth. A well-known trick is to visit the neighbors: they’ll often share more than the customer would like. Anyone caught for fraud, concealment or misrepresentation of the facts can be sentenced and loses all entitlement to compensation.

∞ Ensure order in your own file
If you make a mess of your file, you can’t expect your insurance company to process it within the agreed time. Claims Adjustors are not your personal secretary. Also, don’t forget that you’re not the only customer. If we were to give priority to messy, and therefore time-consuming, files, we would build up more backlog. As a result, we would also have more dissatisfied customers. Priority is given to as many satisfied customers as possible and therefore to orderly files.

COMPLETING YOUR FILE CORRECTLY:
∞ complete in one file per insured person (not all insured persons mixed together), possibly clearly grouped into one large file;
∞ make sure your documents are arranged by date;
∞ avoid mixing invoices or supporting documents from previous files with new ones;
∞ report your form filled in as completely as possible: describe the cause of the accident, the diagnosis of the disease and such as accurately as possible, supplemented by witness statements, medical reports or other evidence;
∞ don’t forget to mention the account number on which the reimbursement can be deposited.

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ReLocate does away with all the drama and takes a “stiff upper lip” look at Brexit. We’ve  consulted leading immigration law firms Fieldfisher and Fragomen, who in preparing their own clients for change during and after Brexit negotiations, have shared a few practical steps with us to keep us on the straight and narrow.

Overview of Outcomes
Yes, uncertainty is set to reign until negotiations commence in early 2017. Considering that the European Treaty established a negotiation period of at least two years in case of an exit, it is unlikely that there will be any immediate changes in the near future.

These negotiations could have a wide range of outcomes:
• The Norwegian, Icelandic and Lichtenstein model: the UK would remain subject to the majority of EU legislation, however there would be no role played in the decision-making process and no right to veto, including no independence from EU legislation nor the European Court of Justice;
• the Swiss model: ability to develop mutual agreements with the EU;
• the Turkish model: remaining part of the Customs Union;
• the “sui generis” model*: a completely new approach to UK / EU relations;
• total withdrawal from the EU*: if this is to occur, there would be swift changes to UK legislation.

From an International Business Perspective – Fieldfisher
Companies are best advised to anticipate change and ensure they are in a position to identify possible issues that need to be addressed as they arise. In doing so they can reassure staff on all levels. So what could possibly change? Establishing which regulations may be the most heavily impacted can be difficult, Fieldfisher has broken down the main points to be addressed into three main areas to be assessed within internationally operating companies: social security/welfare, employment law and of course, immigration. Fieldfisher has highlighted the existing regulations that may be affected, and what the knock-on effects of these changes may be.

1. SOCIAL SECURITY / WELFARE
883/2004 and 987/2009: regulates the social security scheme applicable to internationally mobile workers

Changes?
These regulations are likely to be repealed once the UK leaves the EU, and the mutual treaties previously established between countries will once again be activated.

Knock-on effects:
• The original mutual treaties limit the determination of the social security/welfare scheme to be applied and benefits covered therein;
• they do not provide for any regulation on simultaneous employment (two or more social security/welfare schemes operating at the same time);
• they do not systematically provide for regulations on accumulation of social security/welfare benefits/entitlements;
• they do not systematically provide guaranteed rights in respect of health/sickness costs.

2. EMPLOYMENT LAW
593/2008: determines the law applicable to employment contracts in a cross-border situation

Changes?
Employment contracts between EU and UK will no longer be viewed in the frame of the “free movement of workers” principle.

Knock-on effects
UK legislation will have to be rigorously applied in cases of EU staff employed in the UK being brought before a UK court with an extraneous element, and vice-versa. When UK employers employ staff on EU territory, they will have to rigorously apply the legislation of that EU state.

3. IMMIGRATION – from a business perspective
Changes?
This is still a hot topic of speculation. The UK Government could implement a points system not unlike that of Australia, although there have been indications that this is not preferred by the May administration. The UK borders are unlikely to close completely, however the UK Government is expected to implement some forms of restriction before the “divorce date” to limit a massive influx of people.

Knock-on effects
The knock-on effects of changes to immigration between UK and the EU are wholly dependent on the outcome of the negotiations. If the right to free movement ceases to apply or is restricted, those businesses built on sourcing international talent will then have to look to the new immigration and employment rulings for guidance regarding any future employment. Attempts to limit net immigration to tens of thousands will then result in severe restrictions to the pool of potential employees in the UK.
Fieldfisher’s advice on handling these potential changes within businesses:
• “Nominate a person or team of people who are responsible for monitoring employment issues. Ensure all staff have a contact person to whom they can address questions or express concerns in all the countries in which the organisation operates. This will ensure that all staff, wherever located get the same consistent message which in turn will give reassurance that the organisation knows what it is doing and what needs to be done as we approach Brexit.”
• “Staff may feel unsettled and anxious about how restriction to free movement may affect their right to live and work in the UK or other EU member states. Given the fact some EU legislation will be repealed, international mobility policies may need to be assessed and adapted, and ensure specialist advice is utilised.”
• “Encourage workers to list their entitlements to pension and other social welfare benefits when starting to work outside the UK.”

“The criteria for nationality applications are not always more demanding than those for long-term or permanent residency, and nationality is the more secure option to guarantee residence rights in the long term.” – Jo Antoons, Fragomen

From an Individual’s Perspective – Fragomen

Companies and individuals are naturally concerned about what Brexit will mean for EU nationals living in the UK and for UK nationals who are residing in another EU country. While UK politicians figure out what approach they will propose for those affected, individuals are wondering what actions they can take now. Fragomen suggest three key points of consideration for UK citizens currently living, working or studying in an EU member state who wish to take measures to safeguard their mobility rights.

1. REGISTER YOUR RESIDENCE IN THE HOST COUNTRY
According to Fragomen the first action step is to register your residence if this was not already done. UK citizens without a residence document who have been residing for more than three months in an EU member state should be encouraged to contact the national authorities and obtain one. Not all EU countries impose registration regulations on EU nationals, and in this case obtaining an official residence document before a divorce date is the safest way to avoid grey areas and maintain your right to reside in the EU even after a formal separation.

2. APPLY FOR PERMANENT RESIDENCE
Permanent residence rights and regulations vary from EU state to EU state. Some require five years of legal residence, some (including Belgium) request only three years when specific conditions are met. Fragomen suggest this action step with two reasons in mind:
• This confirms that you fulfill the requirements for the right to permanent residence, useful in cases of long absences from the EU member state where you currently reside;
• this maintains as many other rights as possible after Brexit. British EU permanent residence holders may have their status automatically transformed to that of non-EU nationals, whereby they are granted long-term residence for the whole of the EU or just the country where they currently reside.

EU or national long-term residence does not boast the same breadth of rights as EU permanent residence, however it does guarantee the right to continue residing in the host member state.

3. APPLY FOR NATIONALITY – but only if it is the right option for you
Obtaining the nationality of the EU country where you have been residing may appear to be the obvious option, however, before taking on an additional nationality, ensure that you’ve considered what is involved in the application process:
• Is dual citizenship allowed in your host country?
• What knock-on effects may a change in nationality have on your taxation status?
• Would this lead to a loss of rights? For example, some EU states grant less generous family reunification rights to citizens as opposed to those granted by EU free movement legislation.

That said, criteria for nationality applications are not always more demanding than those for long-term or permanent residency, and nationality is the more secure option to guarantee residence rights in the long term. Nationality can only be revoked in exceptional circumstances, while residency can be lost after two consecutive years of absence from the host country.

It is essential for businesses to maintain their own sense of structure and identity in this time of uncertainty. When approaching Brexit from an individual’s perspective, each unique personal situation must also be taken into consideration before making a decision. If we are able to maintain a sense of order, promote clarity and adaptability within organisations and keep open channels of communication we will ensure the best outcomes are achieved and business operations and lives carry on as calmly as possible.

With thanks to Stefan Nerinckx of Fieldfisher and Jo Antoons of Fragomen.
You can download their whitepapers by following these links:

www.fieldfisher.com
www.fragomen.com

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“While most Western European cities have remained stable in this year’s rankings, UK cities have fallen,” said Kate Fitzpatrick, a Senior International Mobility Consultant at Mercer.  “However the drop is not as large as to be expected, with steep rental prices keeping UK cities up.  In the past year we’ve observed strong rental accommodation prices increase in Aberdeen, and to a lesser extent in Belfast. Although there has been only a slight increase in the average rental price in London, this cost remains at the higher end of the scale when compared to cities worldwide.”

“Although the value of the Euro has remained steady against the US dollar, the Pound has fallen, largely due to Brexit fears,” explains Ellyn Karetnick, Head of International Mobility at Mercer.  “But whilst currency fluctuations will always cause a major impact on costs, local conditions like high property prices can counterbalance the impact of currency movements.  It is important to understand local costs when deploying employees in countries across the world and we use the Mercer International basket of goods to help calculate rankings and packages.”

Few organisations are prepared for the challenges world events have on their business, including the impact on cost of expatriate packages.  This year’s survey again proves that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices contribute to the cost of expatriate packages for employees on international assignments.

Mercer’s survey takes into account 375 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.

According to the 2016 survey, Hong Kong tops the list of most expensive cities for expats, pushing Luanda, Angola to second position.  Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo comes in fifth, up six place from lst year.  Other cities appearing in the top 10 of costliest cities for expatriates are Shanghai (7), Geneva (8), N’Djamena (9) and Beijing.  The world’s least expensive cities are Windhoek (209), Cape Town (208) and Bishkek (207).

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking, said, “Despite some marked price increases across the region, several local currencies in Europe have weakened against the US dollar which pushed a few cities down in the ranking. Additionally, other factors like recent security issues, social unrest, and concern about the economic outlook have impacted the region.”

“Cost of living allowances are intended to help protect the purchasing power of international assignees, and can go up or down depending on inflation levels in the home and host location, and the movement of exchange rates.”

Two European cities are among the top 10 list of most expensive cities.  At number three in the global ranking, Zurich remains the most costly European city, followed by Geneva (8), down three spots from last year.  The next European city in the ranking, Bern (13) is down four places from last year following the weakening of the Swiss franc against the US dollar.   Several cities across Europe remained relatively steady due to the stability of the Euro against the Dollar.  Paris (44), Milan (50), Vienna (54), and Rome (58) are relatively unchanged compared to last year, while Copenhagen (24) and St. Petersburg (152) stayed in the same place.

Brussels meanwhile has climbed the rankings quite significantly, coming up 16 places (from 102 to 86) this year.  Nathalie Constantin-Metrál believes the rise in utility costs in Belgium has a large part to play in this as goods and services  in general increased only slightly.

When we enquired about the expected impact of the impending Brexit Kate Fitzpatrick said “Cost of living allowances are intended to help protect the purchasing power of international assignees, and can go up or down depending on inflation levels in the home and host location, and the movement of exchange rates. Generally speaking, the requirement for any sort of cost of living adjustment increases for assignees from a location with a devalued currency (e.g. UK outbound assignees), while the reverse is true for assignees into such a location (e.g. UK inbounds), as the home country currency now goes further and therefore requires less of an adjustment to maintain purchasing power in the host location than in the past.

That said, organizations take many different approaches to the exchanges rates used to calculate such allowances, the frequency with which they review them, and the thresholds at which they would make any off-cycle interventions, so there will be a range of ways for companies to manage this over the coming weeks and months. It is also important to remember that currency movements – even moderately significant ones – are not uncommon, and many multinational companies will have defined mechanisms for dealing with such volatility.”

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. To purchase copies of individual city reports, visit:
www.imercer.com/products/cost-of-living.aspx

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Daniel Poelman, Business Partner Expats, and Leen Goyvaerts, Business Partner Professions Libérales & Independants at KBC Brussels are keen to introduce me to Julie Fulon, Community Manager for the Brussels branch of Startit@KBC and owner of girleek.net.  We meet at the Brussels incubator and co-working space to find out more.

Happy Accidents & Unexpected Success Stories
“The face of business has undergone a radical change over the last few years,” Daniel tells us.  “There is a growing community of people who have bags of experience, or even none at all, and have a great idea that they seek to develop. Belgium hasn’t always been perceived as having a particularly friendly environment for businesses to develop and grow in, but thankfully that’s changing.”

It really was per chance that Startit saw the light of day.  “The bank organises an annual competition for all employees worldwide.  By getting our own people to pitch ideas we get to involve different backgrounds and cultures in improving our services and optimising internal processes.  There’s never really a set theme and two architects who were working in the Antwerp tower at the time, saw an opportunity to fill the empty floors through an original and socially responsible concept: bringing together young people with bright ideas and entrepreneurs and organisations that would be able to help them get their projects off the ground,” explains Leen.

“They won the pitch and were given a budget by an internal sponsor who simply told them ‘we have the space, now you have the money, let’s make it happen’.  Partnerships with the University of Antwerp, Flanders DC, iMinds and others mean that a great variety of expertises and networks have been brought together under one umbrella that start-ups can use to their advantage.”

It was an unexpected success that saw the first floor in the Antwerp tower filled almost immediately.  Today there are Startit offices in six cities across Belgium, housing some 287 start-ups and 28 nationalities, and the numbers continue to grow.  The Brussels incubator opened its doors last Oct-ober and their very first Pitch Day brought in 15 start-ups.  Today there are nearly 40 start-ups working on their plans for global domination and the co-working space is positively humming with activity.

“You become part of a community. Even if you’re in completely different fields, you can still help each another save time and money.” – Julie Fulon, Startit@KBC

So how does it work? “Start-ups really are just that,” explains Leen.  “They’re at the ideation stage.  Budding entrepreneurs are offered the opportunity to come and pitch their idea to our jury and, if they are accepted, are given 12 to 18 months maximum to develop themselves and to learn to do business.  This is their time to create a real business plan, to complete trial runs and ensure they have a viable business before heading out into the world and officially opening for trade.”

“One of the major benefits of being invited to work here is that you become part of a community,” adds Julie.  “Even if you’re in completely different fields, you can still help each another.  Only the other day at the lunch table one of the tech guys pointed out to two budding entrepreneurs that they would need to keep in mind credit card expiration dates for their online business.  A simple statement, but one that will save them lots of time, stress and money in the future as their monthly membership programme grows.”

And of course there’s the mentorship programme too: “We ask our mentors to meet with their start-ups for at least two hours every two weeks,” Julie continues.  “And although every start-up has their personal mentor, they can ask any of our mentors for help or introductions to potential clients, partners or departments.  It’s easier for the start-up to reach the right people when they can get an introduction through one of our partners or mentors. It’s an invaluable benefit to have.”

“Mentors are usually decided on at Pitch Day.  The jury often knows who will be right for which project but sometimes we ask the candidate who their ideal mentor would be.  Of course many say ‘Bill Gates’,” laughs Leen, “but it does give you an idea of what type of support they are after. We’ll always look at each individual case and find a local mentor who is best matched with their needs.  We also get a lot of interest from people who want to become mentors, but we remind them that it’s an unpaid job that requires a lot of time and effort, so only the truly dedicated should apply.”

Changing Times
It’s rare for start-ups, especially in the tech industry, to find people who understand what they are trying to accomplish.  “We’re increasingly coming into contact with innovative organisations and start-ups through Startit and our Bolero Crowdfunding initiative, which made us realise that we didn’t really have the proper tools in place to service them,” says Leen. “It’s something we very much want to change and the reason why KBC and KBC Brussels decided to establish a national multidisciplinary team that can share its expertise and knowledge and help guide these young enterprises on their journey.  We kick off in a few weeks when we’ll have some 40 people around Belgium whose job is specifically to offer a customised service.”

“We’re learning from the start-ups, just as they are learning from us.  We’re changing our mentality and are bringing new entrepreneurial tools that will benefit all of our clients.” Daniel Poelman, KBC Brussels

“It’s a huge change for KBC too,” Daniel admits.  “We’re learning from the start-ups, just as they are learning from us.  We’re changing our mentality and are bringing new entrepreneurial tools that will benefit all of our clients.”

So what does the future hold?  “The future just happens, our environment is becoming more favourable to business and it’s up to us to be a part of it.  No one said ‘we want to become the leading start-up incubator in Belgium’ but it happened.  The same goes for our industry itself.  We’re investing in digital and ‘the internet of things’ but no one really knows where it will take us.”

“This entrepreneurial spirit is increasingly becoming part of the DNA of KBC.  We’re seeing the benefits of networking and are integrating this into our own business model as well.  We’re longstanding partners of BelCham for example, and given KBC’s Startit commitment to supporting young companies in Belgium, it only felt natural for us to become one of the Founding Partners of BelCham Atelier in 2013, the pioneering incubator in the heart of New York City (located in the same building as the KBC and Belcham offices).  Under the leadership of Chris Burggraeve and Bieke Claes, respectively President and Managing Director, BelCham Atelier has already become the first port of call for Belgian scale-ups who want to explore their potential in the US.” Daniel is proud to conclude.

www.startit.be
www.belcham.org

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