Earn (on the side) flexibly and untaxed

There are three legal social statuses in Belgium, (i) employee, (ii) self-employed and (iii) civil servant. However, the question is often asked whether these classifications are still relevant to the rapidly evolving labour market in which flexibility is key and many people opt for a 'freelance status' or wish to combine several statuses.

Voka has already called for a debate on the labour market of the future, and envisages the introduction of a new status in this respect. Indeed, the standard employee status is sometimes seen as too expensive and too rigid to be able to respond to flexible market demands. According to the employers' organisation VOKA, a new status, between the status of employee and that of self-employed, could be the solution. This new status would firstly need to guarantee sufficient protection and minimum rights, and secondly allow greater flexibility, employability and autonomy. Until such point in time, we will limit ourselves to an overview of the main existing possibilities of earning additional income, whether taxed or untaxed, as a self-employed person.

Earning additional income in the sharing economy
The term 'sharing economy' refers to the services provided through a recognised 'sharing economy platform'. Since the introduction of the sharing economy, private individuals have been able to provide services to other private individuals with the intervention of an online platform which is recognised by the government. Through the new legal framework of the sharing economy, up to 6,130.00 EUR can be earned on the side every year. This amount includes any travel expenses and costs. Social security legislation excludes persons who occasionally perform activities in Belgium in the context of the sharing economy and whose income is below the threshold set to this end, from the insurance obligation in the social status of self-employed persons (Article 5ter of the RD no. 38). In concrete terms, this means that no administrative or registration obligations are attached to the performance of services under these conditions for such a platform.

The income earned via a sharing economy platform only needs to be declared in the personal income tax return and therefore (unlike the income from association work (see 3 below)) does not need be declared via the online service 'Bijklussen'. However, individuals themselves need to keep track of their annual earnings in the context of the sharing economy.

Self-employed student status
Whereas working via the sharing economy exempts income up to 6,130.00 EUR per year, students can in principle earn up to an additional 7,073.00 EUR per year without being taxed. As such, for students it is often more interesting to work with the student-self-employed status. Since 1 January 2017, entrepreneurial students who combine their studies with a self-employed professional activity, and who meet certain conditions, can take advantage of the student-self-employed status.

Depending on their net taxable income, the student may or may not have to pay social security contributions. There are three categories in this respect:

The self-employed student does not have to pay social security contributions if the income is less than half of the minimum threshold of a self-employed person as the main occupation, this being less than 6,775.25 EUR (indexed amount 2018);
If their income is between 6,775.25 EUR and 13,555.50 EUR (indexed amount 2018), the self-employed student pays a reduced contribution of 20.5%, only on the part of the income which is above the lower limit;
If their income is equal to or higher than 13,550.50 EUR (indexed amount 2018), the student pays the contributions as a self-employed person as the main occupation, on all their income. As such, the contribution will be at least 694.46 EUR (2018) per quarter.

Unlike earning additional income via the sharing economy, the self-employed student will have to be affiliated with the social insurance fund as a self-employed person, and there are administrative obligations incumbent on the self-employed student. More information about the conditions of the self-employed student status can be found in our article of 30 March 2017.

Association work
In the context of association work, up to a maximum of EUR 6,310.00 per year can be earned in additional income. This amount includes any travel expenses and costs and applies to all types of jobs in the sharing economy, association work and services from citizen to citizen. Income from association work and services to citizens cannot exceed EUR 510.83 per month. The activities that can be performed in the context of association work are limited to a list of authorised activities. However, association work is limited to employees who already work at least 4 days on 5, pensioners and the self-employed. Untaxed additional association work cannot be combined with professional activities for the same association. As such, it is not allowed to do additional work for an association where you also work as a professional or have done so in the past 12 months.

The association must report the activities carried out under this arrangement via the online service 'Bijklussen'. The online service 'Bijklussen' contains an overview of all the jobs that have been flagged for a person earning additional income and by an association, so that the person in question knows how much more they can work on the side. However, services provided via a sharing economy platform are not included here, although they do count towards the maximum amount that can be earned in additional income.

Earning additional income untaxed – services from citizen to citizen
Finally, there is the possibility of earning additional income untaxed in the context of occasional, paid services from one private individual to another. These services cannot be professional, or provided via the platform of the sharing economy. A list of authorised activities that may be carried out in this context has been drawn up. These include child care, family support services, care for persons in need of care, giving sports classes, minor maintenance work on or around the home, occasional or minor household tasks, etc. These jobs may not be performed with a fixed regularity. It is possible to earn EUR 6,130.00 per calendar year with the restriction that the income from services to citizens and association work may not exceed EUR 510.83 per month.

The amount of EUR 6,130.00 per calendar year applies to all income from all three types of jobs combined, from the association work, from untaxed additional earnings in the context of services from citizen to citizen, and from activities in the sharing economy.

Example. Jan works 4 days on 5 as an employee in a chain of stores: In his spare time he is an organiser for a youth movement. For this he receives a monthly fee of 150 EUR. This activity is authorised in the context of association work, but he cannot earn more than EUR 510.83 per month. If, in addition to this association work, he wishes to earn additional income by providing services to citizens, for example by babysitting every now and then, he must take into account his already earned income of EUR 150 per month in order not to exceed the amount of EUR 510.83. If he also wishes to earn more on the side as a bicycle courier via the recognised sharing economy platform of DELIVEROO BELGIUM, he will have to count all activities together in order to remain below the threshold of 6,130 EUR per month.  

Self-employed person as the main or secondary occupation
If a person is not eligible to earn additional income untaxed under one of the arrangements mentioned above, for example because there is no recognition for a platform of the sharing economy, then they will need to register as a self-employed person as the main occupation or as the secondary occupation with the social insurance fund. This is in contrast to the social status for the 'Self-employed person Without Staff' (ZZP in Dutch) in the Netherlands, where people can easily provide services as a freelancer. Admittedly, a ZZP cannot claim social security in the Netherlands, while a self-employed person as the main occupation or as the secondary occupation builds up social security entitlements.

As a result, all the administrative obligations which the social status entails for the self-employed person must be complied with. It is possible to register as a self-employed person as the secondary occupation if the following conditions are met:

In addition to the self-employed activity, the person also works as an employee for an employer:

  • As a worker or employee, the person works at least half of the number of hours of a full-time employee;As a civil servant, the person works at least half of the number of work hours of a full-time post;
  • A full-time post runs for a minimum of 8 months or 200 days per year;
  • As a teacher with a permanent position, the person works at least 6/10 of a complete timetable, and as a contract teacher at least 5/10 of a complete timetable.

If the person does not meet these conditions, they need to register as a self-employed person as the main occupation, and pay social security contributions on the basis of their main occupation. However in certain cases, the status of secondary occupation can be combined with time credit or 'Vlaams Zorgkrediet' (Flemish Care Credit).

Conclusion
In recent years, a number of legal possibilities have already been developed to allow people to earn additional income untaxed on a limited scale without having to register as a self-employed person. However, if a person does not meet these criteria and does not fall within the scope of untaxed additional income, they should effectively register as a self-employed person, whether or not as the secondary occupation, which entails not only an obligation to pay contributions, but also additional administrative obligations.

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