New aspects and points for attention in respect of the social insurance regulations for self-employed persons

A number of interesting amendments have been introduced in respect of the social insurance regulations for self-employed persons which we would like to inform you of.

1. Deadline for joining

To date, new self-employed persons were required to join a social insurance fund no later than on the date upon which the independent activities commenced.

Since 01 July 2016, they have been required to join prior to the activities commencing.

Anyone caught practicing an independent activity without having joined a social insurance fund can expect to pay a penalty of €500 to €2,000.

2. Joint and several liability for administrative monetary penalties

Henceforth a self-employed person is not only jointly and severally liable for the payment of the social security contributions of his or her self-employed assistant, but also for administrative monetary penalties payable by the self-employed assistant. This pertains to monetary penalties from €500 to €2,000 payable for each established infringement: for example, if the starting self-employed person has not immediately joined a social insurance fund while being obliged to do so, or where it emerges that a person is practicing a different profession to the one that he or she registered for with the Crossroads Bank for Enterprises.

Legal entities have already been jointly and severally liable for some time for both the social security contributions as well as the administrative monetary penalties payable by their ‘members or mandatories’.

3. Applications to have social security contribution payments reduced streamlined

Since 2015 the social security contributions have been provisionally calculated using the professional income for three years beforehand. After that an adjustment is performed using the professional income for the current year.

If those provisional sums are too high, then one can apply for a reduction on the basis of the presumed income for the current year, subject to presenting objective elements that justify such a reduction.

Until recently it was the rule that a separate application had to be submitted for each calendar year.

In the meantime the FPS Social Security has streamlined this rule, which means that henceforth an application can be submitted for one, two or three calendar years using the same application form. Objective elements that concern the reduced income for those years for which a reduction is requested must of course be presented.

A self-employed person must however still submit an application each year, as he or she will generally not be able to present objective elements concerning a reduced income over multiple years.

On the other hand, an unremunerated mandatory can present a report from the general meeting or a copy of the articles of association in order to request a reduction in the provisional contributions for three successive years.

4. No post-retirement adjustment

If you are set to retire or completely cease operating as a self-employed person, then you can apply to stop paying the adjustments after retiring.

Until 2014 you paid social security contributions on your professional income earned three years before the date of payment. That was a final sum that was not adjustable.

As of 2015 you first pay a provisional sum on your income earned three years ago. Two years later an adjustment is performed for this contribution based on the professional income for the contribution year itself.

When you retire you can apply to stop paying these adjustment sums. These adjustment contributions can only be waived under specific conditions:

- You cease your independent activities no later than on the date of your retirement;
- You apply for the adjustments to be waived prior to your retirement commencing;
- The application pertains to the adjustment contributions for the year you retire and for the three preceding contribution years, insofar as these contributions have not yet been adjusted on the date that retirement commenced;
- You did not receive a contribution reduction for any of these years. If this was the case you are still able to waive this reduction, but in that case you will pay increased sums. You will thus have to check whether these expenses outweigh the gains.

For example

You are to retire on 1 January 2017. You can apply to not pay the adjustment contributions for 2015, 2016 and 2017. You must submit the application before 1 January 2017 and you must cease your self-employed activities no later than on that date. In that event, the Social Security Fund will not send you adjustment statements.

Please note:

The application pertains to both the adjustment contributions you must pay as well as to any funds you will receive back. You must thus estimate whether the balance for the entire period is positive or negative.

For example

You are to retire on 1 September 2017. Let’s say that you have to pay an adjustment of €2,000 for 2015, but for the years 2016 and 2017 you will get back €2,500 in total. On balance that means you gain €500, and in this case it is best to not apply for the adjustments to be waived.

Also companies are required to follow the procedure
Conflicts of interest in the new Companies and Associations Code
The new Companies and Associations Code (CAC) entered into force on 1 May 2019. The CAC provides for broader and stricter regulations concerning conflicts of interest that may arise within an organisation. Broadening the scope of regulation means that the directors of cooperative companies, non-profit organisations (ASBL/VZW) and foundations&n
Important things you have to know
Some do’s and don’ts when making a bank donation
The bank donation is still a very popular way of donating money by bank transfer. This is not surprising: if it is carried out according to the rules of the game, the bank donation is a valid donation, without (too much) red tape and without incurring gift tax. However, there are a few rules that threaten to spoil the game if they are not followed correctly. Hence some tips that you should keep in
The further course of the relationship between the UK, the EU and the EEA
What impact will Brexit have on your corporate income tax?
For the time being, the United Kingdom (UK) is still part of the European Union (EU) and the European Economic Area (EEA). The UK has since been given until 31 October 2019 at the latest to implement Brexit. This means that cross-border transactions with the UK continue to fall within the scope of EU directives. However, after Brexit, the UK will no longer be able to rely on these directives. This
Less strict circular for catering sector
New circular regarding the VAT rate for restaurant and catering services
On 1 January 2010, the VAT rate for restaurant and catering services was reduced to 12%. This rate only applies to food. Drinks (including non-alcoholic beverages and coffee and tea) are still subject to the standard VAT rate of 21%. On 23 December 2009, the administration published an explanatory note in which it detailed how an overall price for a menu (including drinks) needed to
From now on, also 'high' fixed cost deductions for self-employed persons
Personal income tax return form AY 2019: several new features explained
From now on, also 'high' fixed cost deductions for self-employed and other changes  The new personal income tax return form for assessment year 2019 was published on 7 April, the starting shot for the annual tax return race. For the Flemish tax return, "only" 6 codes have been added, and for the Walloon and Brussels tax returns, "only"
Does the new definition of a company have any consequences for your organisation?
Broader requirements for registration with the CBE - clarification for unincorporated companies
In a previous article, we explained that the introduction of a definition of 'company' in the new Companies and Associations Code (CAC) also affects the registration with the CBE (Crossroads Bank for Enterprises). In this article, we will discuss in more detail the registration obligation for unincorporated companies.  Consequences of the broader definition of a company  With the new
Noticeable impact on tax matters
Impact of Brexit on registration and inheritance tax
The tension in the United Kingdom is palpable. In the meantime, the initial date of Brexit, 29 March 2019, has been delayed. Depending on whether an agreement will be reached or not on 29 March, UK's departure date will be moved to 12 April 2019 in case of a hard Brexit (no deal) and to 22 May 2019 in case of a soft Brexit (deal). It is clear that Brexit will have an impact on tax matters, bo
An easing-up for most SMEs
New interest deduction restriction mostly offers opportunities
As part of the reforms to corporation tax in late 2017, a new interest deduction restriction was also introduced. This is part of the second phase of the reform, meaning that it applies in principle to financial years starting on or after 1 January 2019 (assessment year 2020). The new interest deduction restriction was introduced in the transposition of the European Anti-Tax Avoidance Directive (A
Some important dates highlighted
The new Companies and Associations Code
The new company and association law had already been announced for some time, and it was approved by the Chamber on 28 February 2019. Below we give a brief explanation of some of the important dates associated with the entry into force of this new legislation.   Introduction of the new legislation  The law introducing the Companies' Code enters into force on 1 May 2019 and repea
The new rules for VAT processing of vouchers
The wonderful world of VAT and vouchers
Vouchers are a very popular marketing tool. There are various types of vouchers: discount vouchers issued by a manufacturer, redeemable at any sales outlet in Belgium, discount coupons issued free of charge by retailers, vouchers where you can get a newly launched article free of charge, gift vouchers that can be redeemed for a whole range of products or services, electronic vouchers, etc. Are yo

Subscribe to our newsletter