The Program Act of 27 December 2012 – published in the Belgian State Journal on 31 December 2012 – provides for a new anti-abuse measure related to social law. Explicit reference is made to the general fiscal anti-abuse measure embodied in article 344 of the Belgian Income Tax Code.
The new anti-abuse measure is introduced to combat various forms of misuse and fraud with regard to social security and labor law. The notion of misuse refers to any ‘evasion of the law’. The Program Law states, in general, that a misuse of social law is present if a legal subject by means of a legal act or a classification of a legal act (further defined as ‘legal construction’) puts him/herself – contrary to the purpose of the law – in or outside the scope of application of one or more provisions of social law.
At this stage, it is unclear which misuses will be targeted. The new Act provides that a Royal Decree to be published after consultation with the National Labour Council will provide further guidance in this matter.
The new legislation provides that, if the social authorities can prove the existence of social misuse, they are not bound by the legal act or classification given to the legal act which is at the origin of the misuse. In practice this means that the social authorities can ignore the legal construction put in place by a company or an individual and can enforce the law as they see fit.
The new legislation does not, however, negate the deemed abusive legal act or classification thereof. In other words, for all other parties involved, the legal construction - and therefore all its consequences - remains in place.
Burden of proof
The burden of proof lies with the social authorities who have to establish – by all legal means of proof – that a company or an individual committed social misuse. In practice this means that the authorities have to prove that the ‘legal construction’ set up by a company or an individual is contrary to the (social) law. According to the new legislation, the social authorities do not need to prove fraudulent intention on the part of the company or the individual. Once the social security authorities have proved that the legal construction is contrary to social law, the burden of proof shifts to the company or individual. A company or an individual can only avoid sanctions if (s)he clearly proves that there was no intention on their part to misuse the social provisions.
Entry info force
In principle, this new anti-abuse measure will enter into force on 10 January 2013. However, in the absence of the Royal Decree detailing the targeted misuses, the new measure will remain unapplicable for the time being.