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TRANSCRIPT
Lydian’s Legal Update Webinar
18 October 2012 - Brussels
Introduction
Welcome to Lydian’s Legal Update Webinar. This webinar is the
third in a series of four this year. Save the next date:
20 December
In order to guarantee the audio quality of this webinar, you are all
put on listen only-mode
Should you have questions during the webinar, please do not
hesitate to use the Questions tool – Menu Go To Webinar
At the end of the presentation we will deal with your most common
questions
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Agenda
The impact of the new anti-abuse provisions on “split sale”
transactions
Real Estate, Energy & Regulatory
Battle against “false” independence: what do you have to know?
Employment, Pensions & Benefits
Modernisation of civil proceedings: written witness evidence and
lawyer’s letter interrupting prescription period
Commercial & Litigation
Secured lending in Belgium: the make-over
Corporate & Finance
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Impact of the new anti-abuse provisions on “split
sale” transactions
Stefanie Debeuf Senior Associate
Real Estate, Regulatory & Environment team
Questions
What is a “split sale” transaction?
The anti-abuse provision of the Registration Duties Code
(RDC) (art. 18, 2): What’s new?
Is this the end of “split sales”?
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What is a “split sale” transaction?
What?
Right in rem for entity A
Residual rights for entity B
Why?
Lower registration duties
Taxation?
0,2 % on right in rem (maximum 95% of the value)
10% (Flanders) or 12,5% (Brussels and Wallonia) on residual rights
Total registration duties of +/- 1%
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The anti-abuse provision of the Registration Duties
Code (RDC) (art. 18, 2): What’s new?
Goal?
Fight artifical qualification for tax purposes
Key notion? “Tax abuse” When? In case a taxpayer is:
avoiding the application of a provision; or
granting himself the benefit of a provision
Against the purpose of said provision
Safe haven? Motives other than tax evasion
Consequence? Taxed as if abusive practice did not take place
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Is this the end of “split sales”?
Certain:
Applicable as of 1 June 2012
Circular 19 July 2012
Transactions with long lease blacklisted
Uncertain:
Full extent of new provision
Tax ruling applications put on hold
Safe haven
Motives other than tax evasion
Not much case law yet
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Battle against “false” independence: what do you
have to know?
Emilie Morelli Associate
Employment, Pensions & Benefits team
Problem: “false” independence
Employment contract versus services agreement
No free choice: the status of the service provider will depend on the presence/absence of subordination
Determining criteria:
the parties’ will
the liberty to organize working time
the liberty to organize work; and
the possibility of a hierarchical check or control
Recharacterisation in case of incompability between the contract and its execution
Government Di Rupo I → battle against social fraud → modification of the Law on Working Relations
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New: presumption of employment contract
Only for certain industries/activities:
Real estate
Surveillance and security services for third parties
Transport of passengers or goods traffic for third parties
Cleaning (Joint Labour Committee for)
Possibility of extension to other industries/activities by Royal Decree
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New: presumption of employment contract
Presumption of employment contract if at least 5 of the 9 following criteria are
not fulfilled (5 “no”).
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The service provider: Yes/no
1. carries economic or financial risks
2. has responsabilities or decision power in relation to the financial means of the
company
3. has decision power in relation to the purchase policy of the company
4. has decision power in relation to the prices policy of the company
5. has a results obligation
6. receives a variable indemnity, in function of the company’s results or
performances
7. is himself an employer and has the possibility to hire people or to be replaced
8. works as a company or usually works for several clients
9. works in offices he owns or rents or works with his own material
Total
New: The administrative committee
The “commission administrative de règlement de la relation de travail”
will take decisions concerning labour relations (sort of “ruling”) if one
or both parties ask
Still to be specified in a Royal Decree
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To do
Entry in force: 1 January 2013
If you belong to a concerned industry/activity:
pay attention to the 9 criteria when drafting or executing services agreements – review existing services agreements
Consider possibility of a ruling?
If you do not belong to a concerned industry/activity:
watch out for possible extension of presumption (horeca/meat processing/…)
keep the 9 criteria in mind - judges and social inspection may use them
Consider opportunity of a ruling?
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Modernisation of civil proceedings: Written witness
evidence and lawyer’s letter interrupting prescription
period
Marijn De Ruysscher Associate
Commercial & Litigation team
Written witness evidence in civil proceedings (1)
What?
Act of 16 July 2012 has introduced rules on presenting written
witness evidence to the court in civil proceedings
Relevance?
Previously only rules for oral witness evidence existed, which
were criticised for being complicated and for slowing court
procedures
Written witness evidence could already be presented to the
court, but there was no legal framework for the court to assess
its value
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Written witness evidence in civil proceedings (2)
Requirements?
The statements must be given by a third party and must relate
to facts for which the witness was present or that he could see
for himself (no hearsay)
The statement must be dated and signed
Content:
First name, surname, date and place of birth, profession and
domicile of the witness and, if applicable, his relation
(family/professional) to the parties or any common interests
Declaration that the witness is aware of the purpose of the
statement and of the fact that delivering false statements is
punishable
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Written witness evidence in civil proceedings (3)
What if the requirements are not met?
According to the parliamentary documents, the statement will
not be null and void. The court will have to use its discretionary
powers to decide which value the non-conforming witness
statement will have (if any)
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Lawyer’s letter interrupting prescription period
What?
A warning letter of a lawyer (advocaat/avocat) will be able to
interrupt the prescription period in civil matters
Now: writ of summons is required to interrupt prescription period
Purpose?
Avoiding the start of litigation with the mere purpose of
interrupting prescription period, while negotiations are still
possible/ongoing
When?
Already approved by the Senate. To be discussed by the
Chamber of Representatives later this year
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Secured lending in Belgium: the make-over
Pieter Meeus Associate
Corporate & Finance team
Reform of Belgian law on security interests over movable assets
Current situation
Complex and unclear system
Dispossession requirement
Burdensome enforcement procedures
Business pledge: registration costs
Legal issues re. transfer of ownership as security interest
and factoring
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Cornerstones of the new system
Efficiency, flexibility and transparency
One concept: right of pledge
All legal provisions united in the Civil Code
Both lender- and borrower-friendly
Belgium as European model
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Right of pledge
Consensual contract
Object: 1 specific asset or a unity of assets (cf business
pledge)
No dispossession: pledgor can use the pledged assets in
its ordinary course of business
Registration in a central register
Enforcement: out of court, appropriation allowed,
freedom of contract but must always be economically
justified
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Register of pledges
National register (FOD/SPF Finance)
E-filing by the pledgee
Enforceability against third parties
Date of filing = ranking date
Anteriority rule
Filing and consulting at a very low cost (cf the
registration cost of a business pledge)
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Other important changes
Retention of title: in Civil Code and general validity
Transfer of ownership as security interest: in Civil Code
and general validity
Factoring: non-assignment clauses are not opposable
Most privileges will be abolished (except superiority for
unpaid seller and legal costs)
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Thank you for your attention.
Q&A
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