LIMOSA declaration for self-employed service providers-risk sectors identified

The Official Gazette of 31 December 2018 released the Royal Decree of 21 December 2018, amending the Royal Decree of 20 March 2007 (implementing Chapter VIII of Title IV of the Programme Law (I) of 27 December 2006, concerning social security affairs, governs the prior declaration for posted employed and self-employed workers).

The Royal Decree lays down the risk sectors referred to in Article 137, 6° Programme Law (I) of 27 December 2006.

From now on, only self-employed workers providing services in risk sectors (i.e. construction, meat sector and cleaning services) are bound by the prior declaration requirement (LIMOSA).

In Commission v Belgium (C-577/10), to justify the declaration requirement and its proportionality, Belgium has alleged that the Limosa system prevents “unfair competition, which includes a social security dimension connected with the protection of workers and consumers and the prevention of social dumping” [ Case C‑ 577/10 Commission v Belgium (2012), paragraph 30 ].

The European Court of Justice observed first that the formalities implied by the declaration requirement are such as to impede the supply of services, and as a consequence, constitute an obstacle to the freedom to provide services.

Recalling settled case law, the ECJ has underlined that national legislation which restricts freedom to provide services, fails within an area which has not been harmonised at EU level, and applicable without distinction to all persons and undertakings operating in the territory of the Member State concerned, can be justified, provided that:

  • it meets an overriding requirement in the public interest
  • that interest is not already safeguarded by the rules to which the service provider is subject in the Member State in which he is established
  • it is appropriate for securing the attainment of the objective which it pursues
  • does not go beyond what is necessary in order to attain the objective pursued

The reasons relied on by Belgium to impose a prior declaration requirement on self-employed service providers, can be considered as overriding reasons based on the public interest, and are capable of justifying a restriction on the freedom to provide services;

However, the ECJ emphasised that:

  • a general presumption of fraud is not sufficient to justify a measure which compromises the objectives of the FEU Treaty [see Commission v Belgium (2006), paragraph 35]
  • the prior declaration contains very detailed information, beyond the objectives pursued

The ECJ concluded that the prior declaration requirement goes beyond what is necessary to achieve the objectives of public interest relied upon by Belgium, and as a consequence, is in breach of Article 56 TFEU.

The Programme Law (I) of 27 December 2006, and the Royal Decree of 20 March 2007, were amended several times (in 2013 and 2014). However, the Commission has considered such amendments as not being sufficient to comply with the ruling in C-577/10.

It must be finally noted that as a consequence of the new rules, Article 2 Royal Decree of 20 March 2007, provides for the categories of posted self-employed workers excluded from the application of Chapter 8, Title IV, of the Programme Law, is also amended.

The following exemptions are repealed:

  • amateur athletes and, if appropriate, their self-employed accompanying persons, who do not have their main residence in Belgium and carry out activities there as part of their respective professions, provided that the duration of the stay made necessary by those activities does not exceed three months per calendar year;
  • self-employed entertainers and, if appropriate, their accompanying persons who are self-employed, who do not have their main residence in Belgium and who come to carry out activities as part of their respective professions, provided the duration of their stay made necessary by those activities does not exceed 21 days per quarter;
  • self-employed workers in the sector of international transport of persons or goods, unless those self-employed workers carry out cabotage activities on Belgian territory;

The other exemptions provided for by the said article are not repealed, “also taking into account the evolving nature of the list of risk sectors that may be adapted in the future to the reality on the ground”.

 

 

 

 

 

 

 

 

 

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