Working in Belgium via Connexion

[oldtimerron]

50%? I think you have some good expenses, or children the other big deduction.

I came from Switzerland, where I had a similar gross rate, and 70% more net pay. The agent convinced me Belgium wasn't that bad, and at first it wasn't. I had a lot of relocation expenses in the first year, second year was tougher, third year I got my full assessment and realized I could not afford to live here on the choices I'd made. I was seriously in debt when I factored in the tax, I'd saved all I could, it just wasn't enough.

When year 3 SS hit, I considered leaving for Switzerland again. My project leader convinced me to stay, so I got some black income extra which I used to pay my taxes. This was the extra income that came back to haunt me later.

It's clear to me now, that no dodgy deal can fix a high tax country and make it competitive with lower tax countries.

I think that if you are a star contractor, you need to realize that Belgium companies cannot compete on net salaries and the agents will tell you all manner of lies to cover the true wammy that the tax system hits you with.

It is not worth it. You'll end up just covering your bills and stressing out over the next tax bill. You can do better in other countries. Even if you settle your tax penalty with BE, I would still leave, because you are already plugged into the milking machine waiting to be milked.

The next time Belgium needs tax money, it will get it from you and unless you plan on spending your life in BE you will never get the fat pension, your taxes are paying for.

So my advice remains, leave, get a job in a lower tax country. The large companies are moving projects to cheaper places anyway. I would not hang around. I'm trying to get moved to join the Spanish team that is taking my project over. The silver lining for me, is if I get moved, I will have a lot more free money, and I can finally pay off my Belgium taxes with the money I save.

If you dealt with CNX, even if you are not on the contract that was illegal. Even if you are on a nice 'hold back taxes' contract or something nice and clean and defendable. It will be difficult for you to prove that you are NOT getting black money, and if they have enough confessions how can you prove that you are different from the 50 that confessed?

So I disagree that you should wait and see, it makes no difference that you create hundreds of millions in sales for Belgium, the tax man does not know or care if you are a key IT person and your project will collapse without you. They just want money now, as much as you can squeeze out of you.

You should not get into the situation where you are paying Belgium for the privilege of working here and the tax man is not interested in your sob stories just because you can't afford the full tax and afford to pay your rent.

[DavidJ]

I asked one of the lawyers where I work to take a look at the documentation received from Cnx. He has also spoekn to one of the lawyers representing some of the contractors. Here is his answer.



____________________


I studied law and have been approached by one of the contractors where I work at a multi nation company. I do not represent anyone connected to this case, nor will I be able to, however I will give my opinion on how I see things.

From what I have been shown there are three issues of note, the first concerns payment of back tax for years where money was not correctly declared.

The second, related to the first, concerns the argument expounded already by several posters that Cnx should be held to account for payment of the money due because they proposed and sold the solution.

As a 5% fee was charged by Cnx, it seems obvious that it included just reward for their expertise in the application of a sound financial solution. They appear to have failed in this regard and therefore one might argue the case for just compensation in respect for this failure. You will have to find a lawyer who will agree with this argument and who will take it forward for you. Beware though, if Cnx are on the brink of going out of business. I have been quoted by one of the lawyers acting for some contractors that the sum of Euro 2.5 million is in fact the figure Cnx need to pay, possibly more. Any successful case against them will in itself not lead to much as they will simply cease trading. Cnx realize the above so I assume does their lawyer so they can afford to be a little brave with people.

The third issue is that they appear to be involved in some simple misrepresentation.

Misrepresentation. A false statement of fact made by one party to another party, which has the effect of inducing that party into the contract

They are currently inviting people to enter into a contract whereby the contractors pay money to them, in return for settling a tax known as PE (Permanent Establishment). The point of note is that this is a tax due from Cnx not from third parties. Nobody, not even the BTA can tell you to pay taxes relating to a third party.

Given the above, this looks to be a straightforward and unsophisticated piece of bluff put together in a hurried fashion, designed to bring in what monies it can. They send hurriedly concocted and somewhat illiterate offers on badly formatted, word documents which contain no headings, names or signatures, ensuring at all times that both they and their legal representative can deny there was ever any attempt to induce anyone into such an agreement or contract. There are contradictions within the documents as to where the money should be sent, which causes further confusion. The requests are never sent embedded within emails but always as attachments, again this is in order to ensure that at a later date people cannot produce emails proving their guilt. These are bogus and very amateur requests and they should be avoided.

I would trust nothing which comes from Cnx. There game is simple for all to see and quite amateur. If they want to get people to enter into an agreement then publish proper and rigid documentation once and once only via their legal representative.

On a broader note the BTA should simply publish the ruling if indeed there is one, as the current situation is clearly unworkable.

[nodric]

So I disagree that you should wait and see, it makes no difference that you create hundreds of millions in sales for Belgium, the tax man does not know or care if you are a key IT person and your project will collapse without you. They just want money now, as much as you can squeeze out of you.

You should not get into the situation where you are paying Belgium for the privilege of working here and the tax man is not interested in your sob stories just because you can't afford the full tax and afford to pay your rent.

Hey oldtimer, I agree if you can leave, now is the time to do it. If the black economy is over (and no one really knows for sure) then contracting in Belgium is no longer the cash cow it was.

Problem for many like me is we are well established here with kids half way through their school life, cars on finance, many with mortgages etc.

For me I am considering leaving and working elsewhere as you suggest but, leaving the family here and even having a legal separation. Drastic I know but, means they are removed from my liabilities. Fortunately she is not a director of my company so they can't pursue her!

I disagree that the BTA does not give a hoot about us. Yes they could scoop some big dividend as a one off hit but then what? Everyone runs and the market declines, we stop spending cash in the shops and the tax receipts don't increase.

I think they want to stop blatant fraud but, at the same time recognise there is a market that has to be supported. As you say the companies are relocating to cheaper jurisdictions so making it even harder or more expensive to get local resource is a long term mistake. Of course they may all be under paid and spiteful pissed off civil servants who are just jealous of anyone who makes more money than them

On the wait and see approach, as I said, if you can leave then do so ASAP, and leave your compliance problems behind as you de-register from the commune. Just make sure you give a forwarding address you won't be found at . Problem is those in my boat who aren't single and living in digs can't just legit. However, simply fessing up to the BTA using Conx as your legal advisor would be suicide. Better to wait and see what comes out in the wash and then take a view on next steps after consulting those you pay to keep you out of trouble.

I repeat paying your taxes to Conx is madness! You might as well all pay me 10K each and I'll promise to sort your taxes out for you. I'll even start a Platinum list

[nodric]

I studied law and have been approached by one of the contractors where I work at a multi nation company. I do not represent anyone connected to this case, nor will I be able to, however I will give my opinion on how I see things.


Misrepresentation. A false statement of fact made by one party to another party, which has the effect of inducing that party into the contract

They are currently inviting people to enter into a contract whereby the contractors pay money to them, in return for settling a tax known as PE (Permanent Establishment). The point of note is that this is a tax due from Cnx not from third parties. Nobody, not even the BTA can tell you to pay taxes relating to a third party.

These are bogus and very amateur requests and they should be avoided.

I would trust nothing which comes from Cnx. There game is simple for all to see and quite amateur. If they want to get people to enter into an agreement then publish proper and rigid documentation once and once only via their legal representative.

I think this supports the wait and see approach. Conx are finished and rushing to give them your hard earned cash and volunteer for the BTA rubber glove is plain daft.

The lawyers advice above is sanity prevailing. Find a new solution and, if the BTA come calling one day let your accountant sort it out, that's his job.

[drivemenuts]

if you are in the situation where leaving Belgium is not an option, this is what can be done as a group:

Find a good lawyer that will approach the BTA, representing the consultants, not cnx.
And present our cases from the other side of the ruling, Requesting that we get the same treatment that CNX is offering. We can push the case showing that CNX is charging the PE to us, and that we want a clear deal, not the doggy one on the table.

PS: Forget about perusing CNX to courts. Even wining,we will end with empty pockets, and still have the BTA after us.

[conexion]

if you are in the situation where leaving Belgium is not an option, this is what can be done as a group:

Find a good lawyer that will approach the BTA, representing the consultants, not cnx.
And present our cases from the other side of the ruling, Requesting that we get the same treatment that CNX is offering. We can push the case showing that CNX is charging the PE to us, and that we want a clear deal, not the doggy one on the table.

PS: Forget about perusing CNX to courts. Even wining,we will end with empty pockets, and still have the BTA after us.

Do not approach BTA unless they approach you first !!! You will NEVER EVER get such a treatment from them. The best you can get is a full tax(on a full amount, not 75%) + 20% penalty(if you are lucky) + VAT(up to 300%) + SS. On average you should estimate 70% of your gross revenue/year - for all your contracting years. This is what happened just few months ago with one of the local Belgian agency and tens of consultants working via them. It happened so quickly that they did not even have time to think - we do. So let's not PANIC!!! Try to calm down, take a deep breath and just wait - that's the best advice for today.

[LetsAvItThen]

Do not approach BTA unless they approach you first !!! You will NEVER EVER get such a treatment from them. The best you can get is a full tax(on a full amount, not 75%) + 20% penalty(if you are lucky) + VAT(up to 300%) + SS. On average you should estimate 70% of your gross revenue/year - for all your contracting years. This is what happened just few months ago with one of the local Belgian agency and tens of consultants working via them. It happened so quickly that they did not even have time to think - we do. So let's not PANIC!!! Try to calm down, take a deep breath and just wait - that's the best advice for today.

Conexion, What is your interest with this thread?
Do you work for CNX and are you the squealing mole?!

Your first post was revealing and helpful. This last one smells v fishy. More threatening remarks in the style we normally receive by email.

If I am wrong, apologies but how do you know all this stuff, eh?

[conexion]

Conexion, What is your interest with this thread?
Do you work for CNX and are you the squealing mole?!

Your first post was revealing and helpful. This last one smells v fishy. More threatening remarks in the style we normally receive by email.

If I am wrong, apologies but how do you know all this stuff, eh?

Do I know you or do you know me? I dont think so !
You can think whatever you like - but you completely misinterpreted my post. I am telling you that if you enter any agreement with anybody being it cnx,BTA or any 3rd party you are probably going to end up paying what I mentioned above(optimistic scenario as penalty can go as high as 100%).
I´m giving you a piece of information which you can´t find anywhere else on this forum or even the entire universe. Yet, you still prefer feeding your subcouncious on rumors rather than on a real life experience. I wrote the last post as nothing speaks louder than numbers and according to what I see there are still people that do not realize the magnitude of the consequences - I am really sad and disappointed that they are even considering this so called "deal". My intentions were not to scare you but to prepare to what may lie ahead should you decide to sign the documents.

How do I know it? I told you, I know few folks that were/still being investigated and I closely followed the settlement deal they made. It´s weired that nobody really has mentioned it until now as I am sure some of them are reading this thread. This is how it all began. One agency got caught, BTA assumed there must be more and there we are...
Until now they are only assuming and as long as no hard evidences have been sent to your home address you don´t have to worry. Remember they have to prove it !

Besides, if you really want to know everything is available on http://www.ejustice.just.fgov.be/loi/loi.htm (Codes des impots sur les revenus) - for those who can read French or Dutch. Just start with art. 333.

Above all, you should believe in what your instinct is telling you but as someone rightfully said Belgian law does not stipulate any 75/25 ruling. Tax is always due on 100% of your income. I would like to also think such ruling existed - yet all my senses are telling me something else. And if you dont even trust your senses then ask your lawyer.

If you want more info just PM me - I start feeling uncomfortable posting all the facts on a public forum - as you say, nobody can be trusted here!

Apologies accepted, LetsAvItThen.

[LetsAvItThen]

Conexion, I just tried to PM you with no luck. Can you email the administrator to get set-up?

[CyranoB]

or that BTA is not interested in chasing single contractors and they would be happy if all ManCos (starting from CNX) apply from now on to the ruling so BTA know from now on that they will get good part of the taxes from the Contractor's income (starting from 2009)

This is basically what ITECS is telling me. BTA were aware of the setup for many years, they just decided that from now on they should get their share of the money...