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03.07.2024

News flash: Check the social debts of foreign subcontractors!

Belgian companies can check tax and social debts via https://www.checkinhoudingsplicht.be/. This way, you can check whether you have to make a withholding on the invoice of a company that performs works in immovable state for you. 

Since Friday 28 June, it’s also possible to check the PDOK debts of foreign subcontractors via the same website. You do this simply by using your subcontractor’s foreign VAT number or, if available, the Belgian CBE number or Belgian VAT number. 

Social debt withholding obligation 

If a foreign employer has debts to the PDOK or cannot provide an A1 document proving that the employee is socially insured in another Member State, this is considered a social debt subject to a withholding obligation. Before paying their invoice, you should now consult this database to check the PDOK debts. (In addition to this check, it is of course still crucial to request valid A1 documents). 

If the subcontractor in question has social debts, you must withhold 35% of the invoice amount and transfer it on to the NSSO. 

 What is PDOK? 

Foreign companies posting workers to Belgium must respect the Belgian wage and working conditions, including payment of the end-of-year bonus. The PDOK (Wellfare Fund for the construction workers) pays the end-of-year bonus (“fidelity premium”) to construction workers. 

Foreign employers who post workers to Belgium and fall under the application of the Joint Committee for the Construction Industry (JC 124) are automatically affiliated to the PDOK via the Limosa notification. These employers are obligated to submit a declaration to the PDOK of wages for the work performances in Belgium at the end of each quarter and pay the 9.12% contribution due on it. They may be exempt from this payment if they already grant a similar benefit to their workers, such as a thirteenth month or an end-of-year bonus. Failure to comply with these obligations creates social debts in Belgium on behalf of the foreign contractor, making the client or main contractor jointly and severally liable and triggering the withholding obligation. 

What about tax debts? 

If a foreign company has a Belgian VAT number, the tax debt check is carried out via the website https://www.checkinhoudingsplicht.be/. For companies without a Belgian VAT number, it is necessary to request a certificate directly from the Belgian tax authorities. This check is then carried out on the basis of the Belgian enterprise number (CBE number) and/or the foreign VAT number. 

Risks in case of negligence  

The obligation to check social and tax debts has existed for some time. If you as a client or a main contractor do not comply with the withholding obligation, you risk an administrative fine and can be held jointly and severally liable for the payment of the tax and social debts. 

EXPERTISE AND SUPPORT 

Van Havermaet International is ready to support you in complying with the necessary due diligence requirements. We specialise in assisting foreign companies temporarily operating in Belgium, as well as their Belgian clients, to ensure that they comply with the relevant legislation and implement efficient internal procedures. As a market leader in this niche, we have built a strong reputation with both companies and regulatory authorities. We provide a full-service solution for many foreign companies, which also benefits their Belgian clients. Our services include among others: 

 

  • Advice, administration and representation of our foreign clients in social and tax inspections; 
  • Acting as social mandate and VAT representative;  
  • Managing transfer pricing and international tax obligations;  
  • Cost control of wages by using wage withholding tax exemptions. 

 

With our in-depth knowledge and experience, we are happy to help you meet all legal obligations and keep your business operating smoothly in Belgium. Interested? You can read about the services we offer to foreign (sub)contractors in our brochure. Contact us for an appointment! 

© Van Havermaet International 2024

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