This reference has been made in proceedings between Partena, the social insurance office for self-employed persons in Belgium, and Les Tartes de Chaumont-Gistoux, concerning the recovery by Partena from that company of social security contributions and surcharges. It relates directly to Belgian social security legislation holding an irrebuttable presumption of self-employed activities in Belgium in respect of persons managing from abroad companies whose registered office is in Belgium, with the result that, irrespective of whether such activity is actually pursued, those persons are covered by the social security scheme for self-employed persons in Belgium.
Les Tartes de Chaumont-Gistoux has its registered office is in Belgium and is a company subject to Belgian corporation tax. Mr. Rombouts owned half of the company’s capital and was appointed as a director. Mr Rombouts was resident in Portugal. He has been employed there, or has been in receipt of unemployment benefit there. Afterwards, he has been self-employed in Portugal. Partena served on Mr Rombouts and on Les Tartes de Chaumont-Gistoux an order requiring payment of EUR 125 696.50 corresponding to contributions and surcharges owed by Mr Rombouts. Les Tartes de Chaumont-Gistoux disputed all claims that Mr Rombouts was subject to the social security scheme for self-employed persons in Belgium. It claimed that the application of Belgian legislation, is contrary to EU law, in particular Article 18 EC.
In those circumstances the Higher Labour Court of Brussels decided to stay proceedings and to ask the ECJ whether EU law, in particular Articles 13(2)(b) and 14c(b) of Regulation 1408/71 and its Annex VII, precludes national legislation which allows a Member State to presume irrebuttably that management from another Member State of a company subject to tax in the first Member State has taken place in that first Member State.
In that regard, the ECJ reiterated that the objective of the provisions of Title II of Regulation 1408/71, which determine the legislation applicable to workers moving within the European Union, is to ensure that the persons concerned are, in principle, subject to the social security scheme of only one Member State in order to prevent more than one system of national legislation from being applicable and to avoid the complications which may result from that situation.
According to the tenth recital in the preamble of Regulation 1408/71, the appropriate criterion for determining the legislation applicable is, as a general rule, the location where the employed or self-employed activity takes place. The concepts of ‘employed’ and ‘self-employed’ activity refer to activities which are regarded as such for the purposes of the social security legislation of the Member State in whose territory those activities are pursued. Accordingly, for the purposes of Article 13 et seq. of Regulation 1408/71, the determining of the location of the person’s professional activity precedes qualifying that activity as an employed or a self-employed activity.
Unlike the concepts of ‘employed’ and ‘self-employed’ activity, the concept of the ‘location’ of an activity must be considered to be a matter, not for the legislation of the Member States, but for EU law and, consequently, for interpretation by the Court. In that regard, the concept of the ‘location’ of an activity must be understood, in accordance with the primary meaning of the words used, as referring to the place where, in practical terms, the person concerned carries out the actions connected with that activity.
By irrebuttably presuming that persons designated as agents of a company or association which is liable to pay Belgian corporation tax or the Belgian tax on non-residents pursue in Belgium a professional activity as self-employed persons, the Belgian provisions are thus liable to lead to a definition of the location of an activity which does not correspond to the abovementioned definition and are thus liable to be contrary to EU law.
It is true that the presumption may prevent social security fraud consisting of eluding the otherwise obligatory social security scheme for self-employed persons by artificially relocating the activity of agents of companies established in Belgium. However, by making that presumption an irrebuttable one, the national legislation at issue goes further than is strictly necessary for attaining that legitimate objective of combating fraud since it thereby acts as a general impediment to those persons’ ability to prove, before the national court, that the location of their activity is actually in another Member State where they carry out, in fact, the actions connected with that activity.