Proposition 52K1858

Projet de loi portant assentiment à et exécution de l'Avenant, signé à Bruxelles le 12 décembre 2008, à la Convention entre la Belgique et la France tendant à éviter les doubles impositions et à établir des règles d'assistance administrative et juridique réciproque en matière d'impôts sur les revenus, signée à Bruxelles le 10 mars 1964 et modifiée par les Avenants du 15 février 1971 et du 8 février 1999.

General information ¶

Submitted by

The Senate

Submission date

Feb. 9, 2009

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

direct tax double taxation tax on income international agreement

Voting ¶

Voted to adopt

CD&V Vooruit LE PS | SP Open Vld N-VA LDD MR FN VB

Voted to reject

Groen Ecolo

Contact form ¶

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Discussion ¶

March 26, 2009 | Plenary session (Chamber of representatives)

Full source

I believe more in example than in words. This applies to everyone.

Colleagues, why did I ask for a few moments of your time? Because this is a complex and complex matter. Amendments to the Treaty between France and Belgium on Border Work. The treaty itself was thoroughly examined in the Senate and shows how some misunderstandings can arise in our country when compensating border workers who work in Flanders but live in France and therefore have a much lower tax on their income acquired in Belgium, and who also for the Belgian employers have no social distinctions with the allures that Belgium causes.

A whole crowd of tens of thousands and tens of thousands of border workers, living in France, have been employed in Belgium, and that is one of the major problems that created a number of problems for most of West Flanders, but also in Henegouwen and East Flanders. Years after years, efforts have been made to address these differences, to establish compensations, and to keep in mind the negotiations that have led to the avenant of this convention, which marks the date of 1964. Believe me freely, those who have been involved with this can tell you that this convention is a very complex matter with a number of transitional measures.

It was discussed in our committee in the Chamber and it is correct that some of our colleagues have rightly made a number of comments. For example, Ms. Detiège noted, as, by the way, also in the position discussed below, that this treaty would have been a missed opportunity to bring about a stricter fiscal control in a certain sense, and also to communicate some data. There was a response that was included in the complexity of this avenue.

Mrs. Muylle has also spent a lot of time in the committee. She lives near the border and therefore has knowledge of business. It has cut down a number of elements related to the introduction, the transitional measures and the possible double tax risks in this avenue.

by Mr. Arens also asked what it was about when there were rules for taxing private sector pensions.

In short, we will be taxed in the place where we paid the salary. This gradually makes homogeneous a situation that the French government wanted to extend with a transition of almost 25 years.

These restrictions and adjustments really pay the effort for those who one day – allow me to be somewhat ironic – would apply a similar system within a given limit.

Mr. Bonte, if we applied the aforementioned system, then those who work in Brussels would have to be taxed in Brussels.

I simply give this as one of the references to the principles referred to by the OECD on this subject.

Mr. Chairman, Mr. De Croo, it is indeed good that we continue to pause on such legislative texts as well.

It is my experience that such legislation goes too fast. For example, the Social Affairs Committee has been able to pay too little or no attention to this point, which I regret.

I remember yet another big, technical problem for French border workers, which I think still exists. I am speaking in particular about the tax treatment of meal checks for border workers working in Belgium.

I do not know to what extent the present treaty addresses or does not address the above-mentioned problem.

Mr Bonte, as far as I know, the problem described by you is not covered in the present treaty.

The reticence of the French authorities has more than once caused the negotiating positions of the Belgian authorities to fall into difficult conditions because the fixed compensations are being reduced in the long run.

I have one point to admit to Mr. Bonte. Such conventions, which are properly dealt with in the Committee on Foreign Relations, could ⁇ be submitted for advice to a trade committee. The text of the avenant of the treaty is a text of dozens of pages which seeks to detect and resolve complications. So I can understand Mr. Bonte’s position. For such technically complicated conventions, the opinion of the competent committee may therefore be requested.

Mr. De Croo, since it is specifically about border work, I would like to give an example. You are asking for advice.

In the Benelux Parliament, border work is one of the major problems. Mr Tommelein recently became President of the Benelux Parliament. I myself was the chairman of the Committee on Financial and Social Affairs and there the problem of border work was constantly addressed.

There are really experts working on the issue. It might be good to ask them for advice as well. If you wish, we can, using the contacts we have, ask for advice from the competent services and persons.

I do not want to take too much of the time of the House. From time to time, however, we accept this too easily as an annex to a short treaty of three articles, an additional element. This often involves such technical matters that it might be good to follow the advice I hear here – I say it very humbly –.

I will examine your suggestion because it is interesting.

The articles of this bill were approved with 1 abstinence and 9 votes in favour. It was hard to stand still for a few moments on this issue. Hopefully we will see these treaties later also approved by this Chamber.

I give the word first to Mr. Deseyn and then to Mr. Arens and Crucke.

The double tax treaty, the avenant, is finally being discussed in this House. It has been a long process. Therefore, I could not afford to give a few more considerations before voting on it.

Since I joined Parliament seven years ago, I have frequently questioned the Minister of Finance on this subject. Such an avenue has enormous consequences for a border region such as South-West Flanders.

It is a discussion that concerns all of us because it is about cooperation between the regions, about cross-border mobility.

One had hoped, that was the vision of the Minister of Finance, that such harmonisation – to be taxed in the working country, in accordance with the provisions of the OECD and as usual, and not in the country of residence – would lead to more just situations for all. I think that it is an insult to a very specific problem, such as that which occurs in parts of Henegouwen and West Flanders, where one rely on the French border workers to maintain the economic fabric. It is about 25,000 people who cross the border to earn their bread from France to Belgium.

There was a community tension. It was said that it was not fair that those people pick up jobs in the Walloon labour market. There have been many projects in the meantime. The VDAB and FOREM have made great efforts in this regard, as have done the employer and employee organisations. Employment trade fairs were organized.

So far, there has been very little substitution. Very few people from Henegouwen have been able to employ in South-West Flemish companies.

There are, of course, reasons for this: labour mobility, the fall in unemployment also plays a role, the cost of childcare, the difficult opening through cross-region bus or train connections. These are all elements that play a role in the debate.

Important is the following. In certain sectors, for example the deep freezing industry in West Flanders, we note critical percentages in certain teams, not only day teams but also night teams, where more than 80% of the team workers have the French nationality. They have triple profits: higher gross benefits in Belgium compared to France, a taxally more attractive system and a more attractive social security system. In the opposite direction, it became a triple disadvantage for the Belgians who were looking for an interesting job in France.

It is the merit of several colleagues and ⁇ also of former Prime Minister Yves Leterme to provide this avenue with a postponement. It was then very sensible to advocate that postponement as it is stated in the avenue. A win-win situation was created for the Belgian border workers who have been asking parties for years and look forward to the approval of this text with great hope. For them, the case is settled retroactively. Their income for 2007 is no longer taxed by the French system, which is detrimental to them, but by the Belgian system.

Some companies are still struggling with a recruitment problem. If one asks whether it is not possible to attract overseas workers who can be usefully engaged in their region, one should look at the unemployment rate in northern France. Both countries had to benefit from an exchange of labor force.

The numbers are what they are. In some Belgian regions, the differences with neighboring regions or districts are more than 10%. There is a problem that requires a long-term solution. We see a small reserve of technical competencies or professional preparation.

In the past, I had the idea of organizing that substitution: bring us people. There are 9000 vacancies of this type. Per ⁇ the crisis has weakened the figure. In the past I have already said that only if those vacancies could be reduced to a reasonable figure of five thousand one could change the existing system and the border workers regime would become less relevant.

I just talked about critical percentages in those teams. You should know well that when that attractiveness completely disappears – now people come 50 to 60 km from Duinkerken – and they no longer want to do so or it becomes more advantageous for them to take a job – if there is one – in France, we create huge problems for business.

Colleague Deseyn, I would like to interrupt you because, in my opinion, it is worth the effort that one in this Chamber knows that the kind benefit that these border workers, living in France and working in Belgium, amounts to 250 to 300 euros per month. In a sense, France is carrying out a piece of potential unemployment and in the other direction, our companies are served to rely on this workforce. That is something that is inevitable. One should also take into account the reality, when one criticizes that too few people from Henegouwen in West Flanders come to work – I understand that – one should also keep those figures in mind.

Definitely, I am sensitive to that. The numbers are what they are. It is not only a Waals-French tension, but ⁇ also a Flemish-French tension. In the people who sit in the production units there is quite a bit of rancor and a sense of jealousy because the neighbor to the band who does exactly the same job earns a lot more net. This is where employers and workers’ organisations meet. They also realized that all this was true, that someone who came from further away kept net more. However, if that neighbor from France had not been there, then that production unit could not survive and the job of the Flaming or the Waal had also been compromised. We must not push the community contradiction to the forefront. I note in West Henegouwen that there too the critical percentages of the French are very high, especially in the textile sector. If recruitment poses a further problem there, it will lead to relocalization very quickly. The preparation of the companies, several years of delay plus the transitional period of 25 years for the people who are in the system and not for the new entrants – which is unfortunately something that could not be acquired – combined with the retroactivity for the Belgian workers, was ⁇ a praiseworthy initiative. Within the framework of European harmonisation, certain systems may no longer be possible. In the long run, new formulas will be developed, whether or not within the context of a Eurodistrict. In this discussion, however, one must also keep in mind that the French tax system has a special regime of levy rates for non-rich residents. When a harmonisation of the system occurs and the Belgians in France are taxed in the working country, with the other Belgian benefits to tax patrimony, one creates a great attractiveness and one may accelerate things in the opposite direction. Then it will be even more difficult to recruit for the Belgian employer.

After all, it is precisely the Belgian employer who then threatens to get out of the job in terms of recruitment and for the most vulnerable vacancies.

My concern is mainly that the system will lead to delocalization. Reciprocal fees will now be paid, which I think has saved it in the short term. The economic reality, of course, is no longer the same as last year.

For the Belgians, it will be especially awaiting how the French will react now, because the negotiations have been very difficult. I was able to follow them on foot. It is good that a text has finally arrived. The Minister has been a little progressive. He also signed things with an ambassador in his own city, which were ultimately not fully supported by the French government. A new negotiation period was initiated with two to three French ministers and with new Belgian governments. Now there is a text that has been approved on both sides. It still needs to be ratified by Parliament.

Per ⁇ we can get from you, on behalf of the government, a position, or at least some insight into how the French are now preparing the procedure for the ratification of the Double Taxation Convention, and more specifically the avenue thereof.

Another important issue that I would like to point out for a moment and that will pose a challenge to our tax administration is the discussion around the 30- and 45-day rule. In the avenue also speaks of a few exceptions. Now, when a worker crosses the border zone – a zone of 20 to 25 km from the border – stricto sensu, when he works one day, for example, in a factory outside that border area, he loses his status for the whole year. Some tolerance, some flexibility is therefore pressing. There have already been a lot of fiscal disputes around because there was also a varying margin of interpretation, various circulars, which were also challenged again. Some say that a tax treaty cannot be interpreted unilaterally, but that negotiations must be conducted on both sides. Now those things are a little more explicitly stipulated, which is a very good thing, but yet it will have to be examined, if it is about the passage, and if it is about a full working day, whether one can count the things there as a day outside the border zone. Information on this subject will, of course, be extremely important for those who are still in that status for 25 years and who, for example, get a job assignment for an employer.

It must not be underestimated, in the mind of the employer, what kind of administration it involves to verify whether worker X, Y or Z has worked on that workplace, because if that worker stays on that workplace for two weeks, then that man earns less and he comes financially into difficult shipwater.

Having pointed out those observations, I can conclude with a strong plea for maximum information, very prompt information with respect to the Belgians. It is about 5,000 to 7,000 Belgian families who wish to declare their income in France and no longer in Belgium. For this purpose, a proof form should be attached. Now one has been given a temporary suspension, but the attacks are soon recalculated, so we are a little tight as the French will not ratify it soon.

Per ⁇ there should be a temporary exception for those people, an extension of the reporting period. These people have also made financial commitments. One cannot blame them for this, because it was several times very close in terms of the political succession of the dossier. I hope that that group of Belgians, for which we are initially responsible, the social secretaries and the various employers, especially in the visited zone, will be informed as much as possible. They are really asking for information, and the government needs to respond to it. Then we can finish the file in beauty.

Mr. Speaker, Mr. Minister, Mr. Colleagues, Mr. Rapporteur, I was surprised to hear you talk about Western Flanders and Hainaut. You have forgotten one very important province of this country, that of Luxembourg!

This is a personal fact because this province has a flame ahead!

Thank you for Luxembourg, Mr. President!

The new avenue proposed today organises in an additional protocol on wage workers the end of the current border regime while providing, importantly, extensive transitional measures for French border workers working in Belgium. In many companies, we talked about Western Flanders but it is the same in Luxembourg: huge numbers of French workers move every day from France to Belgium to work in the construction sector.

This Additional Protocol provides for the payment by France of a financial compensation during the transitional period of 22 years, extending from 1 January 2012 to 31 December 2033. Finally, it will allow the Belgian municipalities to collect the municipal supplementary on the professional income of residents of Belgium exempt from the tax on natural persons, pursuant to the Convention and the Appendix.

However, although this new avenue sometimes lacks precision, it must be acknowledged that it solves many problems at the level of active border workers. In fact, they had to pay their taxes in their country of residence, Belgium, where they are higher than in France, their country of work, and they had to pay their social charges in France, where they are higher than in Belgium, while through their Belgian taxes they already contributed to the financing of the Belgian social security. As I mentioned earlier, this statement lacks accuracy on some aspects.

I regret that the notion of port attachment has not been retained, ⁇ for the construction site staff. The thirty-day out-of-zone rule may also seem relatively insufficient for some. The specific arrangements for transport workers do not appear in detail. Hopefully, the conditions laid down in this avenue will allow them to retain the status of border guards.

Mr. Minister, however, I would like to ask you a question: will the forty-five-day rule referred to in point 4.A of Article 2 of the advance applied for the financial years 2003 to 2008 allow border workers to be reimbursed for the taxes illegally collected by Belgium, if I correctly interpret the draft advance, or will we need to adopt a retroactive law in this regard?

One of the weak points of the avenue is that it does not concern retired border workers who, despite the amendments made by this text, will continue to pay their taxes in Belgium unlike other border workers who work in Germany, the Netherlands or the Grand Duchy of Luxembourg. You see, Mr. Rapporteur, South Luxembourg is even a triangle of three borders; it is even better than one!

The representative of the Deputy Prime Minister and Minister of Foreign Affairs responded in a committee to my question concerning retired workers that Belgium was ready to revise the existing regime, but that the French authorities had opposed it. "France, he added, is very attached to the principle that private sector pensions are exclusively taxed in the country of residence and does not wish to deviate from it."

In the face of this finding, I think that the Belgian authorities should seek an internal solution to this problem, because it seems to me that, in this particular case, we must practically speak of discrimination within the same country with workers on the borders of other neighboring countries. Retired workers have experienced difficult and unfair situations throughout their careers.

Remember the late 1960s and early 1970s: the euro didn’t exist yet and we witnessed many devaluations of the French franc at the time. At one time, it lost almost 40% of its value. Inevitably, this situation severely affected the purchasing power of these Belgian workers occupied in France. Until a certain time, the French employer and even the French State had taken measures to support the purchasing power of these Belgians working in France, and this for two reasons: our workforce was qualitatively highly appreciated by the French employer, on the one hand, and, on the other hand, this workforce was really lacking on the French side at that time.

It was also so true that French employers had set up bus routes that were widely used by Belgian border guards to go to their work. The increasingly difficult financial situation of the border guards turned these moments of travel into a forum for discussion and, from there, strategies for the defense of these citizens were developed.

It was in this environment that a border guard body was established. Its aim was to convince the Belgian authorities to create a compensation system that would allow these citizens to live a dignified life. The group quickly evolved into an ASBL "Committee de défense des frontiers belgo-français". Since 1971, this committee is still very active and unremittingly fights to recognize the situation of these Belgians working in France and make it evolve.

Fifteen or twenty years ago, and I imagine it was the same in Hainaut and Flanders, we said to members of this committee that they were tense and didn’t let go. They were, at the time, from every election campaign – whatever their party was.

Forty years after the start of their fight, these people are still present – and they were even today in this hemisphere (which they left, due to the late hour) – and are more dynamic than ever. It must be said that the palmarès of the victories of this committee is praiseful. And I will only cite the file of retirement points, which were obtained after years of negotiation and action in court to ultimately result in the obligation for Martine Aubry, then French Minister of Employment, to grant them not only to border workers, but also to their widows, widows and heirs. This struggle was conducted from the first to the last stage by this Border Defence Committee and brought to the border guards, and indirectly to the Belgian state, ⁇ 3 billion Belgian francs at the time.

Forty years ago, when this committee was established, the leaders were active young workers. They have struggled for decades to result in today’s vote. So, for them, this is a historic day – that’s why they were present today. But the only shadow on the table is that they are now excluded from the convention. This is a bit surprising! After struggling all their lives for the evolution of this convention, they are not beneficiaries of the provisions of the project of avenue which is submitted tonight to the vote of our assembly. What a sad situation!

Mr. Minister, I rely on you and the government to find a solution to this problem within the framework of our legislation. It is in this context that our group is studying different possibilities of solutions and will probably submit texts to improve this situation.

In short, the real problem is the lack of a clear European regulation that would allow for uniformity of the different tax systems. We are more aware of this when we live along the borders, as is the case with a lot of parliamentarians.

Here is Mr. President, Mr. Minister. Our group will therefore vote on this bill in the hope that the government will follow to resolve the problem of those who have struggled for so many years so that they can also fully take advantage of this evolution of the Franco-Belgian convention.

Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker, Mr. Speaker Deseyn, I have been interested in this issue for a long time and I think that this avenant is not only welcome but resolves some practical problems that our citizens face. We must recognize the same as Mr. I think there are still difficulties. In order for it to exist, it is necessary that at least two parties agree, in the present case the Belgian State and the French State. A priori, France has little to gain by changing a rule that is largely favourable to it. It is the merit of the Minister of Finance to have managed to convince the French state to change this rule. The relevance of their work must be recognized.

Moreover, Mr. Deseyn, it was not necessary to discuss two, but three, because the Flemish and Wallonians did not have the same point of view, due to different realities. We live fifteen kilometers from each other in bird flight but the Courtraisis, the Mouscronnois and the Tournaisis present economic and social differences, differences in unemployment rates. These different realities generate different perceptions, which made it even more difficult to reach an agreement. That is why I am voting in favour of this proposal!

It should be remembered that this avenant ends the discrimination of Belgian workers against French workers. You reminded me of the courtesy situation. I know better the situation of the western Hainaut, for which a figure of 15,000 French citizens are mentioned that cross the border every day. There are also 15,000 job seekers. Let me not be told what I do not mean: that there is an automatic correlation between the two numbers and that the French worker would systematically take the place of a Belgian worker. It is not accurate. But at some times there is correlation. And at those times it is the Belgian worker who suffers from this discrimination, for now and for some time yet, since this rule is transitory and it will take some time for all this to be corrected.

This is true between France and Belgium, but it is also true, Mr. Deseyn, even though this reality is not recognized by the Flemish employer – I had the opportunity to say it to the VOKA – between Wallonian and Flemish workers. Indeed, for the Flemish employer – and so much better, if jobs are still created in Flanders, although the situation is more difficult for the moment and deteriorates somewhat, which I do not look forward to! – it is easier to hire a French worker who, with equal quality, costs him cheaper.

Mr. Crucke argues that it would be more advantageous for a Flemish employer to hire someone with the French nationality than a French-speaking Belgian. I can assure you that this is not the case, because the Flemish employer for people with French nationality is not eligible for some discounts, such as the team premium or measures to develop the Generation Pact. The conversations with business leaders and the statistics show that it is absolutely not more advantageous. On the contrary, he must pay more contributions and take more responsibilities. It is also not obvious for the internal organization of his company. I totally disagree with the position he posits. It is not cheaper.

All Flemish employers tell us that, if possible and with equal competencies, they prefer to hire a French-speaking Belgian rather than a Frenchman, because the latter costs them more. So I don’t know where you get that information, because I haven’t found any evidence on the ground.

I would like to draw the House’s attention to a part of the draft submitted: “The employers from the border region also have an interest in recruiting French border workers as they are not liable for corporate advance tax on the salaries they pay to those workers and they can satisfy themselves with a low gross salary given the moderate level of French taxes.” I quote the report that accompanies the draft.

I would like to thank President De Croo. Mr. Deseyn, I will answer you because you ask me the source of my information even though you know it.

First of all, Mr. Thibaut on the same subject.

Simply to tell you that I am from a border municipality and what we see is that the French who will work in Flanders earn much more net than the Wallons who would work in Flanders. This is obvious! I think that is indisputable. Sometimes, for the same job, the difference can be from 300 to 400 euros net per month, which is huge.

What Mr Thiébaut has just put forward here is not contested. We have just cited it, when Mr. De Croo speaks about the lower corporate premium. Indeed, if the discs of French taxation are so much lower, it is logical that one rests less on the source. But he is responsible for the social security covered by the Belgian system and he sits there with equal contributions and can not count on discounts such as those offered by the Belgian government, because they are only available to support the Belgian workers.

I think some things are thrown on a lot. The gross costs for the employer, what he spends, are higher for a Frenchman than when he employs a Belgian, whether it is a Waal or a Flaming.

Mr. Deseyn, you don’t have to convince a liberal of the weight of taxation in this country. On this point, I largely agree with you. We can reduce taxes as much as we want.

You asked me, with some relevance, the source of my information. Since you mentioned the Eurodistrict, I refer you to a study by EuresChannel, conducted by experts from both sides of the linguistic border but also from France. They studied the profile of the French border worker, one of whom I told you just before that at some times he takes the place of a Belgian worker and others, of a Wallon worker. What is the profile of this employee? He is young, he is unqualified, he gets an indefinite contract.

Mr. Deseyn, I can tell you that you can find in Wallonia, and in Western Hainaut, people who are young, who have no qualification and who would like to have an indefinite contract. But for now, this convention prevents them from being competitive on the labour market; that is why it had to be changed.

Finally, I see another advantage to this rule. This is a fight against tax fraud and social fraud. When we talk about French workers and Belgian workers, we forget to say that we can include a certain number of Belgians in the French workers. These workers have a domicile in France, often purely fictitious, and have a high level of salary! In France, the administrative rule means that there is no increased control for domicile. You can buy a home in France and you can benefit from this system. This is another discrimination that will be put to an end through this avenue.

I regret the length of adaptation of this avenant but we must accept the advantages and disadvantages. Another reason why we can vote for this avenant is that the Belgian municipalities will finally be able to collect a part of the municipal tax of the French who are domiciled in their territories. It is just justice. The Minister of Finance has also been able to get it, and I thank him for it.

There is still a difficulty, and so much. As far as mr. Deseyn stressed that the French now need to ratify the text as soon as possible and vote on it. We all have colleagues in France, regardless of the affinities with a French party for one or the other and we will therefore also be able to remind them that after the negotiation, we must vote on the draft.

This is what we will do soon. I will do it with enthusiasm.

Mr. Speaker, everyone has already said this: it is an important step forward. Both in the committee and in the plenary session, many speakers explained what the discriminations were in the field.

This arrangement is a very good thing, a step forward. It must be voted for!

We are not yet moving towards a total uniformization of tax regimes. But we are going in that direction. The simple fact that the agreement was recently amended with Luxembourg, with the Netherlands then, and Germany, goes in the direction of applying the rules that are those of the OECD.

There are indeed differences between countries. France has not been as conciliatory as the others but, in principle, we have obtained a greater uniformization; it will ⁇ also simplify the situation of regions sharing three borders such as South Luxembourg. This is the problem of the bottle with three quarters empty and a quarter full! This does not solve everything, but we must be satisfied with the improvements that this text brings. Unfortunately, it has no retroactive effect; France did not want it. However, we must rejoice in everything that this brings as improvement for workers of today and tomorrow.

I have no news about the ratification process in France, Mr. Deseyn, but I will take care of it as soon as it is approved here in Parliament.

Finally, I think we can thank the Minister of Finance for his efforts. He had to put pressure on France to ⁇ this agreement.