The Constitutional Court has struck down a law which allowed anyone to earn up to €6,000 a year from doing odd jobs without having to pay tax on the earnings.
The law dates back to 2017, when a proposal from Open VLD was accepted as part of the governing accord of the coalition behind former prime minister Charles Michel.
The law allowed anyone to make up to €6,000 a year without tax for jobs outside of their main professional activity. The idea had been to being into the light the sort of favours people do for others, which deals often take place “in the black”. It would also create a framework for the activities of volunteers such as trainers in a sports club.
The new rule was opposed by trade unions, who complained that professionals carrying out the same sort of work were taxed as usual. It was also opposed by the farmers’ union Boerenbond and Unizo, which represents the self-employed.
The two latter organisations brought the action before the Court.
Now the Court has ruled that the measure was discriminatory as the appellants claimed, by taxing some for the same sort of work done by others tax-free.
“Our opposition was not aimed at youth trainers and volunteers, but at the principle that exactly the same activities as those of a self-employed person were being treated differently. In a country where the tax burden is sky-high, unfair competition is hard to swallow. We are pleased that the Constitutional Court subscribes to this,” said Caroline Deiteren of Unizo.
An additional problem came when services carried out via online platforms like Deliveroo and Listminut were included in the scheme, with jobs carried out via those platforms taxed at a flat 10% rate.
When the application of the new measure was evaluated in mid-2019, it appeared that only a small percentage of the jobs carried out under the measure were by members of the public for other members of the public. The majority were indeed of the nature of youth trainers at sports clubs.
However at that stage, Deiteren said, online services were not being counted.
“The figures were showing a false picture. No data were being gathered about the online platforms. They remained a black box. At the same time, we knew that a lot of odd jobs were being carried out over those platforms for which a professional would have been taxed [at normal rates].”
The law as it stands will remain in force until the end of the year, and then will no longer apply – unless the government finds a way to deal with the Court’s objections.
However the government of Sophie Wilmès does not have the power to bring new legislation of that sort, under the powers that were granted by parliament to deal with the coronavirus crisis.