In a judgement handed down on 19 December 2012, the European Court of Justice states that the duty of notification for self-employed workers who are temporarily carrying on a self-employed business activity in Belgium, which is referred to as the “Limosa notification”, runs counter to the free movement of services (art. 56 TFEU).
The European Commission had requested the Court to establish that sections 137, 8°, 138, third indent, 153 and 157, 3° of the Belgian Programme Law (i.e. special finance act) (I) of 27 December 2006, in the version that applies since 1 April 2007, and the corresponding formalities are incompatible with article 56 TFEU.
Those provisions require a self-employed service provider established in an EU member state other than Belgium, before starting any activity in Belgium, to perform an upfront electronic notification to the Belgian authorities in which he has to communicate some specific details (including identification data and start date and duration of activities).
Decision of the Court of Justice
- The Court has found that the “Limosa notification” for self-employed workers indeed forms an impediment to the free performance of services. This notification makes it for a self-employed service provider established in an EU member state other than Belgium more difficult to perform services on the Belgian territory.
- The Court does recognise that the objectives invoked by Belgium can apply as overriding general-interest requirements that justify such an impediment. Belgium specifically relied on the objective of fighting social fraud and preventing abuses such as sham self-employment.
- However, the Court is of the opinion that the relevant provisions of Belgian law are disproportionate to those objectives because they go beyond what is necessary for achieving them. This is because the duty of notification is not limited to cases where one effectively needs to check whether tax and social obligations have been met. Furthermore, very detailed information is required from the service provider, particularly in the framework of what is referred to as the “regular” notification, without its necessity being justified.
Importance of this decision
The Court is of the opinion that article 56 TFEU prohibits a generalised duty of notification and the extensive information that requires to be communicated, rather than an upfront notification system.
In line with this judgement, John Crombez, Federal Secretary of State in charge of the Fight against Fraud – has announced that he wants to maintain the duty of notification but wants to examine, within the shortest time possible, what information is absolutely required for the purpose of fighting social fraud and sham self-employment. The intention is to adapt the information requirements of the “Limosa notification” as soon as possible to bring them into line with the European rules.
The question then arises, however, taking into account the considerations of the Court, whether it should not also be examined in what sectors and/or for what categories of persons such duty of notification is actually imperative.
Finally, note that, in this case, the European Court has ruled on the “Limosa notification” for self-employed workers only – not on the notification for employees. This means that, for the time being, it is as clear as mud whether the latter duty of notification can also be found in conflict with European regulations.