Renewed social contribution exemption for independents

Renewed social contribution exemption for independents

Every independent entrepreneur in Belgium has to pay social contributions. Whose income is too low to pay social contributions, can apply for an exemption. As from 1 January 2019 the legislation whereby independents can apply for an exemption of social contributions, is reformed.

The Federal Public Service Social Security (DG Independents) is the center of expertise for independents in Belgium. This Federal Public Service manages the registries of the Commission for contribution exemptions (CVB). This special commission can grant independents a full or partial exemption from the obligation to pay social security contributions when they are in “a state close to poverty”. The burden of proof lies with the independent. The exemption can only be applied for by a person who is independent as main profession and it is made through the social insurance fund. An exemption can be obtained for one or more quarters. It includes the contributions themselves as well as surcharges for late payment. During the exemption period the rights to health care (sickness benefit) and children benefit remain applicable. But for the exempt amount no pension rights are build up.

Important changes as from 2019

It becomes possible to obtain an exemption in case of “temporary financial or economic difficulties”. The vague criterion “poverty” or a “state close to poverty” is replaced by the criterion “being in a difficult financial or economic situation”.

The research of the exemption application will be made within the scope of an administrative procedure by the services of the National Institute for Independents' Social Insurances (RSVZ) instead of by the Commission with the Federal Public Service Social Security.

Only the latest version of the application form is accepted.

In order to make the transfer as smooth a possible, the social insurance funds can no longer file new exemption applications between 1 October 2018 and 31 December 2018. The application period which overlaps with this period is extended with three months until 31 March 2019, so the independent has no disadvantage due to the suspension of this period. For that quarter the period is extended with one quarter. This means that the exemption application for the 4th quarter 2017 can be filed at the latest 31 March 2019 (instead of 31 December 2018).

The decisions of the Commission for Contributions Exemption were final, but appeal is possible against the decisions of the RSVZ.

When is an application valid?

Starting independents can only file a valid exemption application once the first 4 quarters of insurance obligation as independent are expired (unless the independent has stopped his activities during the first year).

Independents who already work longer can file their exemption application within 12 months counting from the first day of the quarter following the quarter to which the contribution relates.

Independents can only make an application for their provisional quarterly contributions. When the exemption for temporary contributions is granted, it applies automatically for the regularization payments for the same quarters, except when the income which is the base for the regularization exceeds a certain threshold. In that case the exemption is cancelled.