According to article 3(1) of the Belgian Royal Decree No. 38 of 27 July 1967 on the application of the social security scheme for self-employed persons, agents of a company or association liable to pay Belgian corporation tax or Belgian tax on non-residents are irrebuttably presumed to pursue a professional activity in Belgium as self-employed persons.
As a result of this irrebuttable presumption, EU residents appointed as directors of Belgian companies have been presumed to be exercising a professional activity in Belgium as a self-employed person and have therefore had to subscribe to a social security scheme in Belgium and pay social security contributions in Belgium, without being allowed to prove that they already subscribe to another social security scheme in another EU Member State, and may therefore be paying social security contributions in two or more different Member States.
In its judgment dated 27 September 2012, the European Court of Justice, referred to by the Brussels Labour Appeals Court for a preliminary ruling under article 267 TFEU, considered that the Belgian legislation establishing this irrebuttable presumption was liable to lead to a definition of the location of an activity that does not correspond to the interpretation of the term “location” that would be made under EU case law, namely the interpretation of a word by considering its usual meaning in everyday language, and that it was therefore liable to be contrary to EU law. The European Court of Justice therefore held that EU law – in particular articles 13(2)(b) and 14c(b) of Council Regulation No. 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the EU Community, as amended by Council Regulation No. 1606/98 of 29 June 1998 and Annex VII thereto – precludes national legislation of a Member State to presume irrebuttably that management from another Member State of a company subject to tax in the first Member State has taken place in that first Member State.
Directors of Belgian companies who manage these companies from another EU Member State are therefore released from having to register with a Belgian social security scheme provided they prove that they already subscribe to a social security scheme in that other Member State and thus avoid having to pay social security contributions in both Member States.