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COVID-19 RESOURCE CENTER: FAQ

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List of experts by domain. If you have any questions please feel free to contact covid-19@liedekerke.com.

EMPLOYMENT
     

 

Q: What are the conditions that my business needs to comply with if some of my employees still need to come into work (office, factory, warehouse,...)?

A: The Belgian government has imposed telework for all non-essential companies. For such companies, telework is the general rule for every single job that can be done through teleworking. For jobs that cannot be done through teleworking, companies must take all necessary precautions to guarantee the application of the rules on health and safety and social distancing. This includes in particular that a physical distance of 1.5 meter must be maintained at all times. The social distancing rule also applies to transport organised by the employer. In addition, the employer must take hygienic and sanitary precautions (e.g. regular cleaning and disinfection of the premises, provision of protective equipment where applicable, etc). Non-essential companies that cannot comply with the above conditions must close. If non-essential companies do not comply with these rules, a fine can be imposed and the company can be closed by the relevant authorities.

Essential companies (e.g. hospitals, food stores, transport companies,...) must also comply with the obligation to organise telework and social distancing in as much as possible.

The inspection services carry out controls.  We can provide you with the checklist used for such inspections.


 

 

Q: As an employer, do I need to provide declarations to my employees who need to commute to work?

A: Travel from home to work by an employee who cannot perform his/her job from home is allowed. If the commute to work is within the Belgian territory, the employee is not required to show a declaration from the employer. It is however recommended that employers provide a declaration to these type of employees so that they can justify their travels if they are stopped by the police. If the employee has to cross the Belgian border to be able to go to work, a declaration using a special template will be necessary.


 

 

Q: Will my business need to run social elections in due time?

A: Social elections were to be held in May 2020. Companies that have to organise social elections were already carrying out the various steps as determined by the so-called ‘election calendar’. As a result of the covid-19 crisis, all steps on the election calendar as of X+36 will be postponed. The National Labour Council has advised to postpone the social elections until the 2nd half of November 2020. New legislation will have to determine the exact consequences of such postponement.


 
 

Q: As an employer, can I apply for Temporary Unemployment for force majeure because of COVID19?

A: Yes. If you are no longer able to employ your (entire) workforce as a result of the COVID19-virus, you can rely on temporary unemployment for force majeure to allow employees to obtain unemployment benefits. You can use this measure for instance if you had to close your business as a result of a governmental order, if you have employees who must remain in quarantine, or if there is not enough work to be done to keep all employees occupied. The employment agreements with your employees are maintained but suspended. This can be a full or partial suspension. (e.g. employees are still working on some days, but are not employed on others).

In order to benefit from this measure, you need to apply for temporary unemployment. The formalities have been simplified.

During this Temporary Unemployment, the employees required to stop working will receive a replacement income from the RVA/ONEM for the days of inactivity. In normal circumstances, such unemployment benefits amount to 65% of a limited remuneration, but the government has decided to increase this percentage to 70% (until 30 June 2020). On top of this unemployment allowance, the RVA/ONEM will add a supplement of EUR 5.63 per day.

 
 

Q: As an employer, can I apply for Temporary Unemployment for economic reasons?

A: Yes. Employers encountering economic problems as a result of the COVID19-crisis can also opt to apply for temporary unemployment for economic reasons. The application procedure for blue-collar workers and for white-collar workers is slightly different. The workforce and the employee representation (works council or trade union delegation) should be informed as well. However, in the current situation, the procedure for Temporary Unemployment for force majeure because of COVID19 (see above) is easier and faster.

 
 

Q: As an employer, can I apply for a payment plan for social security contributions due to  employees?

A: Yes. If you are encountering financial problems as a result of the COVID19-crisis you can apply for a payment plan for social security contributions that are due to your employees. The payment plan will apply to social security contributions for the first and second quarter of 2020, and if granted, you will be able to postpone the usual payments and pay your debts in monthly instalments. The social security administration will decide on the specific terms of each plan.

If you are a natural person who has to pay social security contributions as self-employed person, there is a similar possibility to either apply for a payment plan or to apply for an exemption to pay social security contributions, if specific conditions are met.

 
     
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CORPORATE & M&A
Annual accounts
     

 

Q: Based on the numbers of the FY 2019, is it still possible (and under which conditions) during this COVID-19 crisis to pay out dividends to shareholders?

A: Yes, there is no general prohibition to pay out dividends to shareholders during this COVID-19 crisis. However, and especially now in light of the recent circumstances, it is important that the company meets the financial thresholds (as imposed by the Belgian companies and associations code) in order to be allowed to distribute dividends. These thresholds are as follows:

  • NV/SA: No dividends may be distributed if, as a consequence thereof, the net assets of the company would fall below the amount of the issued capital, increased with the statutory reserves;
  • BV/SRL: No dividends may be distributed if as a consequence thereof (i) the net assets will become negative or (ii) the company would no longer be able to pay its debts as they fall due over the next 12 months.

Please note that for credit institutions, the ECB has issued a recommendation on 27 March 2020 that no dividends (for the FY 2019 and 2020) shall be paid out by credit institutions to their shareholders. This recommendation lasts until at least 1 October 2020.


 
 

Q: Should the annual report (on the annual accounts for the FY2019) include any information with respect to the impact of the COVID-19 crisis?

A: Yes. In accordance with the Belgian companies and associations code, the annual report should provide information regarding important circumstances that have occurred since the closing of the financial year. If your company is impacted by the COVID-19 crisis, the annual report on the annual accounts for the FY2019 should indeed include information on this.

Our corporate department is standby to assist you with the preparation of the required documentation regarding the approval of the annual accounts.


 

 

Q: Given the on-going COVID-19 crisis, a physical annual general meeting of shareholders cannot be held. What are the alternatives to have the annual accounts approved?

A: Unless otherwise stated in the articles of association of the company, the shareholders can approve the annual accounts by means of unanimous written resolutions. We have also been informed that the Belgian government will resolve in the upcoming days to temporarily ‘suspend’ the applicable timing delays within which the annual accounts should be approved by the general meeting.

[Update 30 March 2020] Belgian Minister of Justice Koen Geens has communicated very recently that for annual general meetings which are scheduled to take place before 19 April 2020 (this date may be modified if the time period of the measures is again prolonged), a postponement is allowed of 10 weeks. Furthermore, the board of directors may decide that the annual general meeting shall be held from distance (by electronical means), even if this is not provided in the articles of association of the company.

Please note that these measures are not yet in force at the moment, as they have been submitted for the review of the Council of State. After the approval of the Council of State, the measures will enter into force, after their publication in the Belgian Official Journal.

 
     
   Governance
     

 

Q: Given the on-going COVID-19 crisis, it is not possible to convene a physical board of directors. What are the alternatives?

A: Unless otherwise stated in the articles of association of the company, it is also possible for the directors to take resolutions by means of:

(i) a telephone- or videoconference among the directors; or
(ii) unanimous written resolutions.

Both alternatives have the same legal effect as a physical board of directors. Please note that the second alternative requires that the minutes of the resolutions are signed by all directors.

Our corporate department is standby to help find the most efficient and workable solution for your company and board.
 
[Update 30 March 2020] Belgian Minister of Justice Koen Geens has communicated very recently that unanimous written resolutions of the board of directors are now allowed in all circumstances.

 
 

Q: Our company has a managing director (dagelijks bestuurder / administrateur délégué). What are his/her powers during this COVID-19 crisis?

A: In principle, the powers of the managing director (often also referred to as the ‘CEO’) are limited to the ‘day-to-day management’ of the company. Under the new Belgian companies and associations code, the ‘day-to-day management’ of a company is defined as “actions and decisions which do not exceed the needs of the daily life of the company, as well as actions and decisions that, either because of their minor importance or because of their urgent character, do not justify the intervention of the management body”. Consequently, all decisions and actions with an urgent character can be taken by the managing director.

One important exception should be taken into account, more specifically the situation in which the articles of association of a company would explicitly limit the powers of the managing director to certain decisions/actions or to certain monetary thresholds.

Our corporate department is standby to help you with the assessment whether or not certain decisions can be taken by the managing director.

 
 

Q: Certain strategic management decisions have to be taken but one (or more) of the directors is unavailable and our company has not appointed a managing director. Can we still take decisions?

A: In most public limited liability of companies (NV/SA), the management body is organised as a board of directors. This means that, in principle, one director alone cannot validly make management decisions, but that the board of directors, acting as a collegial body, must make these decisions. 

The board of directors can validly deliberate and decide if (i) it has been validly convened and (ii) at least half of the directors are present or represented at the meeting (unless the articles of association impose more stringent quorum requirements). In any event, at least two directors must always participate for deliberations to be valid. Therefore, if the board of directors is composed of only two directors, these two directors will necessarily have to participate in deliberations. If one of the two should be unavailable, the following options could be considered:

- if a physical board cannot be held, deliberation can take place via telephone or video conference or the board may adopt unanimous written resolutions (unless provided otherwise in the articles of association);

- an additional director can be appointed (as the case may be, temporarily) by unanimous written shareholders’ resolutions, so as to allow the board to deliberate and decide with two out of three directors;

- if a director has become definitively unavailable, the board may itself appoint a (temporary) replacement via co-optation;
In general, it is also possible for a director to grant a proxy to another director.
Management decisions that were adopted and implemented without board deliberation can subsequently be submitted to the board for ratification (and it is recommended that this be done).

Our corporate department is standby to help find the most efficient and workable solution for your company and board.
 
     
   Financial situation of the company   
     
 

Q: Are there any corporate formalities to take into account if our company is facing substantial losses due to the COVID-19 crisis?

A: Yes, if your company is facing substantial losses due to the COVID-19 crisis, it may have to comply with the “alarm bell” procedure as set out in the Belgian companies and associations code.

The criteria for the application of the alarm bell procedure are as follows:
- NV/SA: The alarm bell procedure shall be applied if the net assets of the company fall below (i) one half or (ii) one fourth of the capital.

- BV/SRL: The alarm bell procedure shall be applied if (i) there is an imminent risk that the net assets will become negative or (ii) it appears that the company will no longer be able to pay its debts as they fall due over the next 12 months.

If the alarm bell procedure applies, the management body must convene a general meeting which shall resolve upon the continuation of the activities of the company or in the alternative case, the liquidation and the dissolution of the company. The management body must prepare a report in which it proposes the measures that will be taken to preserve the continuation of the activities of the company (unless the management body would propose to cease the activities of the company).

The directors can be held liable for any losses which are suffered by third parties if the directors did not convene the general meeting of shareholders (in due time).

Our corporate department is standby to assist you with the preparation of the required documentation with respect to the alarm bell procedure.
 
     
   Listed companies   
     

 

Q: Does the COVID-19 crisis impact a listed company’s disclosure obligations?

A: No, the COVID-19 crisis does not release listed companies, subject to the Market Abuse Regulation, from disclosing inside information to the public as soon as possible. The European Securities and Markets Authority (ESMA) has moreover clarified that “issuers should disclose as soon as possible any relevant significant information concerning the impacts of COVID-19 on their fundamentals, prospects or financial situation in accordance with their transparency obligations under the Market Abuse Regulation”. We have seen several listed companies issuing profit warnings in the last few days.

This obligation also applies to companies which have already seen their stock price fallen significantly in the recent days. Such companies may believe that the “Corona effect” is fully known to the public and hence properly reflected in their stock price. Still, some companies might be much more (or much less) impacted by the COVID-19 crisis than the market can understand (for example because its key supplier has stopped delivering) and this may give rise to a disclosure obligation.
 
[Update 30 March 2020] In its press release of 26 March 2020, the Financial Services and Markets Authority (FSMA) has asked issuers “to communicate as soon as possible about any event, decision or information they have become aware of and that is likely to constitute inside information that relates to them directly. These include, for example: temporary interruption of production, the delay of important projects, and stoppage of clinical studies and suspension of dividends”.

 
 

Q: I am holding a managerial position in company whose shares are listed on the Brussels Stock Market. Because of the COVID-19 virus, the stock market price of the company is subject to very strong fluctuations. Are the rules on the reporting of share purchases or share disposals by persons holding managerial responsibilities and persons closely associated with them now relaxed ?

A: No, they are not. The Market Abuse Regulation and its Belgian implementing regulations continue to apply. As a consequence, persons holding managerial responsibilities (leidinggevenden/dirigeants) at issuers and persons closely associated with them (Managers) must still report to the relevant issuer and to the Belgian regulator FSMA each transaction pertaining to the issuer’s securities. The obligation to report applies as soon as the total amount of the transactions within a calendar year reaches the threshold of EUR 5,000 and applies to every subsequent transaction (but companies may have included a lower threshold in their dealing code).

In addition, Managers should in any event continue to respect the restrictions imposed during closed periods and, in general, refrain from trading in the issuer’s securities when in the possession of inside information. Managers should carefully follow the instructions given by the issuer’s dealing code and the dealing code officer at all times.
 
     
   Various practical questions
     
 

Q: If a company intends to take a decision that requires the involvement of a Notary (such as, a modification of the articles of association; capital increase etc.), are Notaries available for the execution of notarial deeds?

A: Notaries are still available, but we understand that they are only allowed to execute notarial deeds in extremely urgent situations or in situations where the company justifies that, without the execution of the deed, the company would suffer serious financial implications (for example in case of a capital increase, corporate reorganisations, contributions etc.).
 
     
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   COMMERCIAL CONTRACTS AND FORCE MAJEURE
     
  Contract clauses such as force majeure, hardship, or risk clauses are relevant to determine the impact of the COVID-19 pandemic on your contractual relationship, and need to be assessed as a priority. The Q&A’s hereafter apply in the absence of a force majeure or other risk clause in your contract, or as a general guideline, in case of doubt on the scope of these clauses.  
     
 

Q: Can force majeure be relied on to renege on my contractual obligations and liability further to Covid-19?

A: In light of the exceptional nature of the pandemic and of the governmental measures that are being taken, it is expected that you will often be able to rely on force majeure if you acted in a reasonable and cautious way since the outbreak of the crisis and if the performance of your obligation is reasonably or humanly impossible. Each case will need to be assessed on the basis of its own merits.

If you are a debtor of financial obligations, you will in all likelihood not be able to rely on force majeure, but the theory of abuse of rights (see further) may provide a safety net. In addition, you will be entitled to suspend payment if the reciprocal obligation of the other party is not performed.


 
 

Q: What are the consequences on my contract in case of force majeure?

A: If the impossibility to perform is temporary, your contract will not be terminated, but the prevented obligation is suspended until its performance becomes possible again. In the meantime the reciprocal obligations of the other party are suspended as well. 

If the impossibility to perform is permanent (or if its delayed performance will be useless) the reciprocal contract is automatically terminated and you and the your contractual party are definitively relieved from your obligations.

In any case none of the parties will be liable for any damages to the other party, unless the agreement provides for some kind of allocation of the financial consequences of force majeure.

 
 

Q: Can hardship be invoked to alter my contractual obligations further to Covid-19?

A: Hardship refers to similar circumstances as force majeure but without the strict condition of impossible performance. There is hardship when an unforeseeable and inevitable event substantially affects the contractual balance between the parties. Under current general Belgian contract law, hardship does not alter the contractual obligations and does not entitle you or your contract party to claim partial or total relief, renegotiation or termination of the contract, unless this is expressly agreed in a hardship clause.

If your contract contains a hardship or material adverse change (MAC) clause, it is likely to be triggered by the COVID-19 pandemic. You should refer to that clause if applicable, and check the conditions, required notifications (including time-limits) and consequences.

 
 

Q: What about an abuse of rights defence in connection with Covid-19 ?

A: In some circumstances where strictly speaking a contract party cannot invoke force majeure, a court could consider that, given the exceptional and unforeseen circumstances of the COVID-19 pandemic and the mutual interests of the parties, the party that is refusing any adjustment to the contract, claiming forced unaltered performance of the contract instead of tempering its claim, is not acting in good faith. That claim may then be rejected or reduced by the courts on the basis of abuse of rights. Although the theory of abuse of rights is applied with caution and only in cases of obvious abuse, one can expect that courts (whose own functioning is affected by the pandemic) will be more flexible than usually, both on force majeure and on abuse of rights.

 
 

Q: What about financial obligations in the context of the COVID-19 crisis? Will my financial obligations be suspended ?

A: In theory, you cannot suspend a financial obligation unless the reciprocal obligation is not performed. However financial debtors may be able to rely on abuse of rights in the framework of the covid-19 crisis, and courts can grant payment terms to the “honest but unfortunate” debtor. It is expected that the COVID-19 outbreak will justify such payment terms on a case by case basis, taking into account the respective financial situation of creditor and debtor. Parties can of course also mutually agree on changed payment terms given the circumstances.

 
 

Q: Can my contract party insist on the performance of an agreement even if it has become temporarily useless because of the COVID-19 pandemic?

A: Yes, strictly speaking you cannot rely on force majeure to excuse the non-performance of obligations that are not technically impossible but have only become useless. However it can be expected that a flexible approach of the condition of “humanly or reasonably impossible” or the theory of abuse of rights can still be invoked, not necessarily fully relieving you of your obligations, but at least entitling you to postpone or spread some of your obligations in the future.
 
 

Q: Should I notify to my contract party in case of force majeure and hardship?

A: Commercial contracts generally contain a force majeure clause, specifying the conditions for force majeure (often with examples) and possibly imposing an obligation to notify the event of force majeure to the other party within a certain time limit. If this is not the case, you should inform the other contract party as soon as you are aware of the temporary or permanent impossibility to perform.
 
     
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   INSOLVENCY, RESTRUCTURING AND REORGANISATIONS
     

 UPDATE 

 (3/04) 

Q: How should my business approach pending (financing) agreements?

A: It will be important to analyse the terms of your financing agreements, with a focus on force majeure, hardship or ‘material adverse change’-clauses. You may want to invoke said clauses to argue that the COVID-19 outbreak constitutes an event that justifies (temporary) non-performance of contractual obligations in order to divert some of the (economic) impacts involved. Note, however, that force majeure or ‘hardship’ – to the extent these concepts are included in your financing agreements - are rarely accepted as grounds for frustration of payment obligations under financing agreements. See also our FAQs under Commercial Contracts and Force Majeure and under Banking & Finance.

 
 

Q: How will the COVID-19 pandemic impact on business continuity and which steps should my business and its directors take in the event of liquidity shortages or default events?

A: Belgian insolvency law requires any enterprise as well as its directors to file for bankruptcy within the statutory time limit of one month as from the moment it is established – or should reasonably have been established – by the Board that the bankruptcy conditions are satisfied. For the time being, the mandatory time limit for bankruptcy filings of one (1) month remains in full effect notwithstanding the current crisis.

In order to safeguard business continuity, a debtor may consider filing for judicial reorganisation proceedings (JRP) to obtain a general stay on creditor enforcement actions. During JRP proceedings, the Board remains in charge of business activities and operations (‘debtor-in-possession’) and will have to work out a restructuring plan.
 
     
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   TAX & SOCIAL SECURITY
     

 

Q: Can my business benefit from an accelerated VAT credit refund?

A: All monthly VAT payers – including those who do not have a license for monthly VAT reimbursements and are not considered as starters – will receive an accelerated reimbursement of their VAT credit on their current-account (as from 31 March 2020), under the following conditions: (i) for all VAT-taxpayers filing monthly VAT returns, who wish to receive an accelerated reimbursement, the filing period for the VAT return of February 2020 is now set to 3 April 2020, (ii) the VAT return must be filed via Intervat, and (iii) the reimbursement will only take place if the box “request for reimbursement” is checked.

Up to 3 April 2020 the VAT payer may file a corrected VAT return via Intervat in order to change this option. The other basic conditions for reimbursement continue to apply.

Instead of a reimbursement on 29 May 2020, or even at the latest on 30 June 2020, the reimbursement will take place on 30 April 2020 at the latest. The amount to be received may however still be the object of a retention or a use for any other outstanding debt and of a “verification VAT-credit”. Please note that this filing date does not preclude the possibility to file the other VAT returns of February 2020 (that do not have a credit position or for which no VAT refund is claimed) timely by 6 April 2020.


 

 

Q: Can the COVID-19 crisis be considered as a special circumstance justifying the exemption of value decreases on commercial receivables?

A: Yes, since the COVID-19 crisis will undoubtedly put the treasury and the solvency of undertakings in difficulties, the tax authorities will apply a more flexible interpretation of the exemption conditions for value decreases on commercial receivables. 

The tax authorities have confirmed in their new administrative circular 2020/C/45 of 23 March 2020 that the COVID-19 crisis is a special circumstance that justifies the exemption of value decreases on commercial receivables held vis-à-vis undertakings that have a delay in payment of receivables that result directly or indirectly from measures taken by the Federal Government. Upon applying for the exemption of the value decreases on commercial receivables, the undertakings must identify the debtor in the special form 204.3 and indicate that the solvency of the debtor is jeopardized. The tax authorities will evaluate these receivables on a case by case basis, but have indicated that they will apply flexibility in appreciating the recovery difficulties vis-à-vis the debtors whose turnover was significantly impacted by the lock down measures as imposed by the Federal Government.


 

 

Q: Can my business benefit from a tax advantage for donations of medical goods or devices in the context of COVID-19?

A: Yes, the Government has provided for some temporary measures (administrative circular 2020/C/46) that apply to donations made between 1 March 2020 and 30 June 2020 that relate to goods used in the medical sector. These measures include a specific VAT regime, measures with respect to corporate income tax and non-resident tax for companies and measures with respect to personal income tax and non-resident tax for individuals.


 
 

Q: Can my business rely on special tax measures as a result of Covid-19?

A: All enterprises (individuals and legal entities), irrespective of their sector of activities, with a valid registration in the Central Enterprise Register (KBO/BCE) that encounter hindrance as a result of the COVID-19 virus can rely on tax support measures from the Federal Belgian tax authorities.

These tax support measures relate to payroll tax, VAT, personal income tax, corporate income tax and legal entity tax, and consist in either a payment plan, an exemption from late payment interests and/or a waiver of fines for non-payment.
In order to benefit from the late payment plan, enterprises must file a request by 30 June 2020 at the latest via a specific form (see: https://finances.belgium.be/fr/entreprises/mesures-de-soutien-dans-le-cadre-du-coronavirus-covid-19). In this request, enterprises must indicate the financial difficulties that they suffer as a result of the spreading of the COVID-19 virus.

The enterprise must file one request per (tax) debt. Tax support measures will not be granted if the enterprise has structural payment difficulties, and this irrespective of the COVID-19 crisis.

Any tax support measure granted by the tax authorities, will be annulled if the enterprise does not respect the late payment plan (unless the debtor timely informs the tax authorities) or if a collective insolvency arises (bankruptcy, judicial reorganisation, ...).

 
 

Q: Can my business rely on a deferral of the filing deadlines of tax returns as a result of Covid-19?

A: Insofar that the ultimate filing date of the tax returns was initially foreseen between 16 March 2020 and 30 April 2020, a deferral of the filing deadline of the tax returns is automatically granted until 30 April 2020 (midnight) for filing the tax returns in relation to the corporate income tax, legal entities tax and non-resident company tax.

Furthermore, taxpayers benefit from an extension of the deadline for submitting their periodic VAT returns and intracommunity listings. The deadlines for submitting VAT returns and intracommunity listings are extended as follows : for February 2020, extended to 6 April 2020; for March 2020, extended to 7 May 2020; for the first quarter of 2020, extended to 7 May 2020.
The filing date for the yearly client listings is deferred until 30 April 2020.

If the activity was ceased, then the filing should be made at the latest on the end of the 4th month following the discontinuation of the activities.

 
 

Q: Can my business benefit from a payment deferral for my taxes as a result of Covid-19?

A: For the payment of personal income tax, corporate income tax, non-resident income tax and legal entity tax, there will be an additional period of two months that will automatically be added to the ordinary payment term, without late payment interests being due. This measure applies to the payment of taxes with respect to tax assessment year 2019 that are assessed as from 12 March 2020 onwards.
 

For the payment of tax debts with respect to the personal income tax or corporate income tax for which the tax assessment took place prior to 12 March 2020, the initial federal support measures do apply (i.e. a payment deferral plan, an exemption from late payment interests and/or a waiver of fines for non-payment may be requested).

For the tax assessment forms that were sent until 27 March 2020, the tax authorities could not modify the due date on the tax assessment forms. These forms do therefore mention the ordinary payment date of 2 months (as opposed to the current 4 months). Irrespective the fact that the additional payment term of 2 months is not mentioned on these tax assessment forms, the payment delay of 4 months does also apply to these tax assessment forms.

An automatic deferral of two months is granted for the payment of VAT and payroll tax, without any fines or late payment interests being due.

- The payment dates for VAT are as follows: monthly VAT return for February 2020, deferral until 20 May 2020; monthly VAT return for March 2020, deferral until 20 June 2020; quarterly VAT return for 1st quarter 2020, deferral until 20 June 2020.

- The payments dates for payroll tax are as follows: monthly return for February 2020, deferral until 13 May 2020; monthly return for March 2020, deferral until 15 June 2020; quarterly return for 1st quarter 2020, deferral until 15 June 2020.


 
 

Q: Can my business benefit from a tax free cost compensation for homework?

A: The Belgian ruling commission provides a possibility for undertakings to grant a tax free compensation of maximum EUR 126.94 per month to each of its staff members that is working from home, irrespective of the function of the respective staff member. This compensation qualifies as a reimbursement of a own cost of the employer (that is paid for the costs related to home work). In order to benefit from this measure the employer can file a request with the ruling commission. The ruling commission has made a draft template available on its website : https://www.ruling.be/nl/nieuws/aanvraag-thuiswerk-covid-19.

Please note that the social security authorities have also issued instructions in this respect. Please see: https://www.rsz.fgov.be/nl/werkgevers-en-de-rsz/coronavirus-maatregelen-voor-werkgevers/vergoeding-voor-thuiswerk

 
 

Q: Does the COVID-19 crisis impact my tax situation if I am a cross border worker ?

A: Certain tax residents that would normally work in a cross-border context (living in France and working in Belgium or living in Belgium and working in Luxembourg or vice versa) are now incentivised or obliged to work from home. Since their physical presence in the home state has an impact on the power of taxation that is to be allocated to either the work state or the home state (on the basis of the applicable double tax treaty and relevant administrative circulars), certain measures have been put in place as a result of the COVID-19 crisis.

With respect to France, a worker who resides in France and who physically works in Belgium in a frontier zone could normally work for a period of 30 days outside the frontier zone. The Belgian and French tax authorities have decided that this crisis qualifies as force majeure within the meaning of Art. 7, b of the additional protocol to the Belgian-French double tax treaty, and that the homeworking days will be ignored for calculating the number of days present in the other state than the work state. This measure applies as from 14 March 2020 onwards until further notice.

A similar agreement was reached between the Belgian and the Luxembourgish tax authorities. The Belgian-Luxembourg agreement allows that a worker that lives in one state and works in the other state may not be physically present in the work state for a period not exceeding 24 days. Also for the Belgian-Luxembourg amicable agreement, the respective tax authorities have decided that the current COVID-19 crisis is a force majeure situation whereby the homeworking days will be ignored as from 14 March 2020 onwards for calculating the period of 24 days.

 
 

Q: Can my business rely on regional tax measures as a result of COVID-19 ?

A: Enterprises can also rely on a series of regional tax measures:

- In the Flemish Region: (i) an automatic deferral of real estate withholding tax for enterprises with legal personality, (ii) an automatic deferral for the payment of road taxes for enterprises with legal personality, (iii) an extension of the period to comply with the tax obligations with respect to inheritance tax and registration tax, and (iv) a flexible grant of payment deferral plans upon request. Enterprises without legal entity may apply for flexible payment deferral plans;

- In the Walloon Region: (i) suspension of the payment date for taxes, that will be deferred until the end of the COVID-19 crisis, (ii) the freezing of the deadlines for introducing tax complaints (administrative appeals or judicial appeals), (iii) a softening of the tax recoveries that are in progress or that were about to be started and a facilitation of payment deferral plans, (iv) an abolishment of physical audits and control by correspondence, and (v) a moderation of administrative fines related to the mileage tax, (vi) an extension of the initial period of two years during which a property must be resold in order to benefit from the refund of 3/5 of the registration duties paid on acquisition of the property, (vii) an exceptional reduction of the registration duties to 0% with respect to mortgage mandates, and (viii) a reduction of the tax on automatic entertainment devices for undertakings with 1/12th per month or part of the month during which the establishment is mandatorily  closed.

- In the Brussels Region: a suspension of the payment of the tax on tourist accommodations for the first semester of 2020.
 
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   REGULATORY - ENVIRONMENT
   Permits & spatial planning – Flanders
     

 

Q: I have a pending building permit request or want to apply for a new building permit. What happens next?

A: Decision periods for pending and new building requests have been extended as follows: 

  • Ongoing public investigations (“openbare onderzoeken”) were suspended on March 24 and will continue after April 24, 2020. Objections submitted in the meantime are admissible.
  • Public investigations not yet started will only start after 24 April 2020
  • The decision period (ordinary procedure) is extended by 60 days
  • The decision period for the simplified procedure is extended by 30 days
  • The decision period in an administrative appeal is extended by 60 days
  • The decision within which an administrative appeal can be submitted is extended by 30 days

 

 

Q: I have a building permit. When can I execute it?

A: The total waiting period is extended by 30 days and is thus (currently) 65 days in total.


 

 

Q: What are the main consequences of the Covid-19 crisis for filing and handling appeals at the Permit Dispute Council (“Raad voor Vergunningsbetwistingen”) and the Enforcement College (“Handhavingscollege”)?

A: Deadlines for submitting appeals and starting periods are extended by 30 days. This also applies to expiry periods. As far as claims for suspension in case of extreme urgency (“uiterst dringende noodzakelijkheid”) are concerned, it will be possible to use an email as a method of notification, and a different hearing arrangement will be organised. The Flemish Minister of Justice can extend the mentioned periods


 

 

Q: Can my building permit hearing (“hoorzittingen”) still take place?

A: The local provincial authorities can decide to organise the hearing by written representations, via a conference call or a video conference or to postpone it.


 

 

Q: What about the advice issued by the advisory body in the context of pending building permit procedures?

A: Advisory periods are not extended. However, the failure by the advisory body to provide advice or an advice issued late will not automatically be detrimental. A late advice can thus still be taken into account by the competent authority and the advisory body will not lose its ability to submit an appeal in case of a late advice or no advice. It is in any event recommended that the competent authority and the advisory body consult each other as much as possible.


 

 

Q: I want to build temporary health infrastructure in the context of the Covid-19 crisis? Do I need a building permit?

A: The Decree of 20 March 2020 imposes a temporary derogation from the permit obligation and notification for, amongst others, the construction and exploitation of additional and temporary hospital infrastructure and other care facilities, additional production facilities for medicines and medical equipment and research institutions related to the outbreak of the Covid-19 virus.

 
     
   Permits & spatial planning – Wallonia
     

 

Note that the Walloon Government has adopted a general 30-days suspension of deadlines between 18 March and 17 April 2020.  It can extend these deadlines twice for 30 days (each time), which is likely in the current circumstances.   
     

 

Q: I have a pending building permit request or want to apply for a new building permit. What happens next?

A: Decision periods for pending and new building requests have been extended as follows: 

  • Ongoing public investigations (“enquêtes publiques”) are suspended for 30 days, between 18 March and 17 April 17 2020.
  • Public investigations not yet started will only start after 17 April 2020.
  • The decision period is extended by 30 days.
  • The application for a building permit may be filed with the competent authorities and the authorities can treat the application but no public investigations can happen between March 18 and April 17.

 

 

Q: I have a building permit. When can I execute it?

A: If the permit has been obtained prior to 17 February 2020, the permit can be executed. If the permit has been obtained after 17 February 2020, the execution date (date of the obtaining + 30 days) is extended by 30 days (example: permit obtained on 20 February may only be executed as from 20 April 2020).


 

 

Q: What are the main consequences of the Covid-19 crisis for filing and handling appeals against permits ?

A: Deadlines for submitting appeals and starting periods are extended by 30 days. This also applies to expiry periods.


 

 

Q: Can my building permit hearing (“audition”) still take place?

A: No, a new hearing will be organised after 17 April 2020.


 

 

Q: What about advices given by public authorities in the context of pending building permit procedures?

A: Advisory periods are also extended by 30 days. However, it does not preclude the authorities to issue their opinion, regardless of the extension period.


 

 

Q: I want to build temporary health infrastructure in the context of the Covid-19 crisis? Do I need a building permit?

A: Yes, no exception related to the Covid-19 crisis has been adopted in this regard.

 
     
   Permits & spatial planning – Brussels
     

 

So far, no specific provisions have been adopted so that, in theory,

  • Building permit request should be handled normally;
  • Decision on permit request may be taken;
  • Appeals may be lodged and handled normally;
  • Permits already obtained may be executed.

However, we are aware that a draft Decree is currently under examination by the Conseil d’Etat and should lead to the adoption of measures which will have an impact on the obtaining of permits, appeal periods, public investigations, etc. We will provide you with more information as to the precise impact of these measures (if adopted) as soon as the Decree is published in the Belgian Official Gazette.

 
     
   Other Regulatory questions
     

Q: How can my business assess whether it is an essential or a non-essential enterprise?

A: The federal government has listed all essential enterprises in the Ministerial Decree of 18 March 2020. Please note that this list was updated afterwards, and will likely receive other updates in the future. You can check the list yourself (consult the 23 March 2020 version here), or contact us in order to determine which rules apply to your enterprise.

 
 

Q: My business is a non-essential enterprise. Should we close our operations?

A: Not necessarily. Generally speaking, all establishments in the hospitality sector, as well as non-essential stores, must be closed. However, that does not mean that they cannot carry out back-office operations.

Further, all non-essential enterprises are required to organise teleworking where possible. Employees with jobs that cannot be carried out from home, can come to work provided that the “social distancing rule” (i.e. maintaining 1.5 metres distance from all other people) can be respected. With regards to jobs that do not allow teleworking or social distancing, a non-essential enterprise has two options: (i) it can either transfer these employees into temporary unemployment but continue operations with the other employees, or (ii) it is obliged to shut down altogether.

 
 

Q: Can my employees still undertake business trips by car or public transport?

A: It depends but most likely not. The rule is that using public roads is forbidden – regardless of whether your enterprise is an essential one, or not. Only if a business trip is absolutely essential for the further functioning of your enterprise, can an employee undertake such a trip. And if so, the employee must still comply with the social distancing rules, if you are a non-essential enterprise.
 
     
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   CONSUMER LAW AND TRADE PRACTICES
     

 

Q: Can I, as a traveller get a refund if my package holiday is cancelled ?

A: The Belgian Ministerial Decree of 19 March 2020 stipulates that in case a package holiday is cancelled either by the tour operator, or by the traveller, the tour operator is allowed to offer travellers a voucher, which must be valid for at least one year, instead of a refund. The traveller cannot refuse the voucher.


 

 

Q: How long will the ban on promotions and sales remain in force?

A: At the time of writing (March 31, 2020, 10:00 a.m.), the government has not yet provided any official information regarding the end date of this ban. 

However, several newspapers are referring to the statement made on Twitter by the Minister of Economy and Consumers on 30 March 2020 that the ban on promotions might be lifted soon, since the ban has led to a price increase prejudicial to consumers and the rush period in department stores has now either ceased or has been regulated by the department stores themselves.


 

 

Q: Which businesses are affected by the ban on promotions and sales?

A: The central website on COVID-19 https://www.info-coronavirus.be indicates that promotions are prohibited for department stores. No reference is made to other stores or to online activities.


 

 

Q: Does the covid-19 crisis impact the rules governing the legal guarantee on consumer goods?

A: No. As a general rule, every consumer has a right to a legal guarantee of 2 years when buying a consumer good (article 1649quater Belgian Civil Code). 

Further to the central website on COVID-19 https://www.info-coronavirus.be, the measures taken in light of the COVID-19 pandemic do not affect the general rules relating to this legal guarantee. The consumer is still owed the guarantee and must still notify the seller of the defect (mail, e-mail, etc.) as soon as possible.

If the seller has not received the notification about a defect from the consumer because of a closure due to the COVID-19 pandemic, he will not be able to invoke the fact that the legal term has expired and refuse to take any action. From the moment of notification, the warranty period will in principle be stayed until the seller offers a solution (repair or replacement).


 

 

Q: What kind of compensation does my business need to offer the public in the event of cancellation of an activity of cultural, social and civic importance, festive, folkloric, sporting and recreational nature?

A: Further to the Ministerial Decree of 19 March 2020, the cancellation of a cultural, social, festive, folkloric, sporting or recreational event due to the COVID-19 pandemic, entitles the organiser of such an event to grant the holder of a paid admission ticket a voucher worth the amount paid instead of a refund, provided that the cancelled activity is reorganised (i) within one year after issuing the voucher, and (ii) at the same location or a location nearby. If either of these two conditions is not met, the holder of the admission ticket or voucher has a right to reimbursement of the price of the original ticket. The holder of the admission ticket is also entitled to a refund if (s)he proves that (s)he is unable to attend the activity on the new date.


 

 

Q: Can my business continue to sell hydroalcoholic gel or protective masks ?

A: The sale of hydroalcoholic gel or protective masks - amongst others - has been strictly regulated in the Ministerial Decree of 23 March 2020. 

With regards to retail sales (“vente au détail”/ “kleinhandelsverkoop”) this Decree provides that only accredited pharmacies are now allowed to sell protective masks or hydroalcoholic gel, and only upon prescription by a healthcare professional.

As to wholesalers (“grossistes”/ “groothandelaars”) , they can now only sell such products to specific customers, namely :

  • Other wholesalers of these products;
  • Licensed pharmacies;
  • Hospitals;
  • Recognized health professionals;
  • Undertakings that need these products under Book 9, Title 2, of the Codex on well-being at work, and in quantities that can reasonably be foreseen for use within the next month.


These sales restrictions shall remain in force for an initial period of 3 months as of 23 March 2020.


 

 

Q: How can a document validly be signed electronically in the context of the covid-19 crisis?

A: Under certain conditions, an electronic signature will be accepted as a valid proof of consent, including consent to a contract. 

However, not all technical means that exist to “sign” in the internet environment will be admissible and provide sufficient legal certainty. Placing a copy of a handwritten signature on the bottom of a digital document, for example, is not as such equivalent to an advanced electronic signature, let alone a qualified electronic signature that deserves full equivalence to a handwritten signature. The qualified electronic signature, which gives the recipient the possibility to check the identity of the signor in a certificate issued by a trusted third party, and gives the insurance that the content of the document has not been modified after signing, should in any event be privileged whenever the stakes are high.


 
 

Q: What are the most important commercial restrictions that affect my business?

A: The Ministerial Decrees of 18, 23 and 24 March 2020 have formulated urgent measures to limit the spread of the coronavirus COVID-19. The measures with the greatest impact in practice are undoubtedly the obligation to close shops, the restriction of access to department stores and the ban on promotions.

 
 

Q: Am I obliged to close all my shops and retail outlets?

A: No. Department stores, food stores and night shops, pet food shops, pharmacies, newspaper kiosks, petrol stations and fuel suppliers are, under certain circumstances, allowed to remain open.

Additionally, all stores and retail outlets are allowed to continue their online activities (webshops).

 
 

Q: Is my business banned from doing promotions and sales?

A: There is a very broad ban on promotions, and contradictory reports on the interpretation of this ban. FPS Economy has not yet issued clear-cut guidelines as to how to interpret it. We believe that the promotional ban only applies to department stores. The food, night, pet food and newspaper shops, pharmacies, petrol stations and hairdressers, should not be affected by the promotional ban. In addition, we believe that it only applies to offline sales. Online sales, on the other hand, should not be affected.

 
 

Q: As a traveller, am I entitled to any compensation if my flight is cancelled due to COVID-19?

A: In most circumstances not. The European Commission recently released Interpretative Guidelines on the EU passenger rights regulations in the context of the developing situation with COVID-19. The Commission waives the right to compensation on condition that the cancellation in question is caused by extraordinary circumstances, which could not have been avoided even if all reasonable measures had been taken.

This condition should be considered fulfilled, where public authorities either outright prohibit certain flights or ban the movement of persons in a manner that excludes, de facto, the flight in question to be operated.

This condition may also be fulfilled, where the flight cancellation occurs in circumstances where the corresponding movement of persons is not entirely prohibited, but limited to persons benefitting from derogations (for example nationals or residents of the state concerned).
 
     
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   DATA PROTECTION
     
 

Q: As an employer, can I perform systematic body temperature checks of workers and/or visitors?

A: Yes, mere temperature measurements are not considered as processing of personal data. If these measurements are not combined with the recording or processing of personal data, they do not fall within the scope of the GDPR.

 
 

Q: Can I oblige my employees to complete a medical questionnaire or a questionnaire relating to recent trips?

A: No. Recent trips, as well as any symptoms shall only be reported on a voluntary basis.

 
 

Q: As an employer, can I reveal the names of infected persons/workers to prevent the spread of the virus?

A: No, this is not allowed pursuant to the principles of confidentiality and proportionality of the GDPR. As an exception to the above, and under certain circumstances, you may communicate the names of the infected person to the doctor in charge or to the competent authorities.

 
 

Q: Can I prohibit my employees from participating in meetings or gatherings with family or friends during their free time, or from travelling abroad?

A: As a general rule, no. The Belgian Data Protection Authority points out that you may not take any measures that exceed the scope of labour law or the instructions of the competent authorities.
 
     
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   REAL ESTATE
     

 

Q: Can my business be exempted from its financial obligations under a retail lease if my leased retail premises have to close to the public by order of the government (such as the current lock down measures) ?

A: There are indeed serious grounds for retail tenants to validly claim an exemption from their financial obligations resulting from retail lease agreements, for the duration of the imposed closing by governmental measures.

The payment of rent is the contractual counterpart of the landlord’s principal obligation to provide the tenant with the peaceful enjoyment of the leased premises in accordance with the destination provided for in the lease agreement. One may argue that the lock-down measures prevent the landlord from providing such peaceful enjoyment, and that the tenant is consequently exempted from its corresponding (financial) obligations under the lease for the period during which closing is imposed by authorities.

However, it is important to note this will require a case by case assessment, as contractual derogations may apply.


 

 

Q: Is my business exempted from its financial obligations under a long term lease (emphytéose/erfpacht) if the leased retail premises have to close to the public by order of the government (such as the current lock down measures) ?

A: No. The Act of 10 January 1824 on long term leases provides that the long term lessee has no right to any fee reduction in case of a complete or partial loss of use. The parties can, however, contractually derogate from this principle. This will have to be assessed on a case by case basis.


 

 

Q: Can my business invoke the covid-19 pandemic to be exempted from its financial obligations under its office lease ?

A: As the government has not ordered offices to close, there is no reason to exempt tenants from their corresponding (financial) obligations under the lease.


 

 

Q: Can my business invoke the covid-19 pandemic to be exempted from its financial obligations under a (financial) leasing agreement ?

A: This is unlikely, taking into account the nature of the leasing agreement as a financial instrument. The defining performance of leasing agreements is the landlord’s obligation to finance the acquisition or construction of a building and not to ensure the tenant’s peaceful enjoyment of the premises during the term of the contract. However, this will have to be assessed on a case by case basis, as contractual derogations are possible.


 

 

Q: Can my business terminate its lease agreement given that the leased premises cannot be opened to the public due to the lock down measures imposed by the government ?

A: No. A contract party is released from its obligations resulting from a synallagmatic (reciprocal) contract, such as a lease, if – and to the extent that – the other party is unable to perform its obligations under the contract due to an event of force majeure. Such release of contractual obligations is, however, only temporary if the event of force majeure is temporary, as is the case here with the currently applicable governmental lock down measures. In addition, termination of a lease requires court intervention.


 
     
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   COMPETITION / STATE AID
     

 

Q: What is the impact of State aid rules with regard to the support measures implemented by the Belgian State to cope with the economic consequences of COVID-19?

A: The existence of an aid within the meaning of Art. 107.1 TFEU is subject to four cumulative conditions: 1. the measure must be imputable to the State and financed through State resources; 2. the measure must confer an advantage on the recipient undertaking; 3. the advantage must be selective (as opposed to a measure granted to all undertakings); 4. the measure must distort/threaten to distort competition and affect trade between Member States.

Depending on the type of measure adopted by the Belgian State in the context of the COVID-19 outbreak, the abovementioned conditions might or might not be met. The Belgian State may actually adopt a broad set of support measures:

- measures applicable to all companies (e.g. wage subsidies, suspension of payments of corporate and value added taxes or social contributions). The Belgian State has already adopted similar measures at federal level.

Those measures do not constitute State aid within the meaning of Art. 107.1 TFEU as they are applicable to all undertakings and are not selective.

- direct financial support to consumers as opposed to undertakings (e.g.: measures adopted to reimburse consumers for cancelled events that are not reimbursed by the operators concerned). As the compensation is directly granted to consumers and not to undertakings within the meaning of Art. 107.1 TFEU, those measures fall outside the scope of State aid.

- measures applicable to certain undertakings in certain sectors or to an individual undertaking (e.g.: compensation scheme adopted to compensate undertakings organising events for the cancellation of events related to COVID-19; State aid scheme adopted to compensate certain undertakings in the HORECA/aviation sectors due to the losses of revenues as a result of the containment measures/travel restrictions implemented for the COVID-19, etc.).

For instance, the Belgian government announced on 22 March that it will activate a guarantee mechanism (EUR 50 billion in total) for all new loans granted until 30 September 2020 (up to 12 months) to viable non-financial undertakings.

As a general rule, the measures adopted to target certain companies in a specific sector (or to target an undertaking individually) are selective measures likely to constitute State aid provided the other conditions are met (i.e. involvement of State resources, advantage, affectation of trade between Member States and distortion of competition).

All new individual aid and State aid schemes must be notified to the EU Commission unless they are specifically exempted from prior notification (e.g. measures falling under the General Block Exemption Regulation or falling under the De minimis Regulation). That scheme will be notified to the European Commission for approval.


 

 

Q: What initiatives have been taken by the European Commission in the field of State aid with regard to COVID-19?

A: On 13 March 2020, the EU Commission published a communication on a coordinated economic response to the COVID-19 Outbreak (https://ec.europa.eu/info/sites/info/files/communication-coordinated-economic-response-covid19-march-2020_en.pdf).

In its Communication, the EU Commission highlighted a number of legal bases enabling the Member States to provide financial support :

- Article 107 (2) (b) TFEU:

aid granted to make good the damage caused by natural disasters or exceptional occurrences shall be compatible with the internal market.

On 18 March 2020 the EU Commission adopted a template for notifications of State aid under Article 107 (2) (b) TFEU, which provides for the structure and information required in order to notify State aid on the basis of Art. 107 (2) (b) TFEU, including sector-specific information.

- Article 107 (3) (b) TFEU:

aid to remedy a serious disturbance in the economy of a Member State may be considered compatible with the internal market.

The EU Commission adopted on 19 March 2020 a Temporary Framework for State aid measuresenabling Member States to use the full flexibility foreseen under State aid rules to support the economyMember States may implement five categories of measures to support undertakings facing severe liquidity needs (see next question).

- Article 107 (3) (c) TFEU:

This legal basis as further specified in the Rescue and Restructuring State aid Guidelines, enables Member States to adopt aid schemes to meet acute liquidity needs and support undertakings facing financial difficulties

Certain Member States have already expressed the need for the EU Commission to provide for even more flexibility in the application of State aid rules to certain sectors, for example, the auto and aerospace industries may require more support measures than what is currently allowed under the coordinated response adopted by the EU Commission.


 

 

Q: Which measures are covered by the Temporary Framework adopted by the EU Commission on State aid measures to support the economy in the current COVID-19 outbreak? 

A: Under the Temporary Framework on State aid measures to support the economy in the current COVID-19 outbreak adopted by the EU Commission on 19 March 2020 (https://ec.europa.eu/competition/state_aid/what_is_new/sa_covid19_temporary-framework.pdf), Member States are enabled to adopt temporary support measures on the basis of Article 107 (3) (b) TFEU which include the following:

(i) Aid in form of direct grants, repayable advances or tax advantages: the aid must not exceed EUR 800,000.00 per undertaking to address its urgent liquidity needs

(ii) Aid in the form of guarantees on loans: State guarantees or guarantee schemes supporting bank loans taken out by companies (public guarantees on loans for a limited period and loan amount).

(iii) Aid in the form of subsidised interest rates for loans: public and private loans to companies with subsidized interest rates, at least equal to the base rate applicable on 1 January 2020 plus the credit risk premium corresponding to the risk profile of the recipient, with different rates for SMEs and non-SMEs.

(iv) Aid in the form of guarantees and loans channelled through credit institutions or other financial institutions: granted through a financial institution to its customers in the form of guarantees on loans (ii) and in the form of subsidised interest rates for loans (iii)

(v) Short-term export credit insurance: Member States may provide support in case they can provide sufficient evidence of the unavailability of cover for the risk in the private insurance market.


 
     
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   BANKING & FINANCE
     

 

Q: My business is located in the Brussels Region. Can it rely on economic relief measures enacted by the Brussels Region in response to the COVID-19 crisis?

A: Yes, the Brussels Region has announced several measures to address the COVID-19 outbreak and its economic impact on companies and businesses located in the Brussels Region.

It will make available to companies, via the Brussels Guarantee Fund (Fonds bruxellois de Garantie/Brussels Waarborgsfonds), public guarantees on bank loans (up to a certain amount).

It has also announced that capital repayments of loans granted by its investment vehicle Finance&invest.brussels (formerly the Société Régionale d’Investissement de Bruxelles/Gewestelijke Investeringsmaatschappij voor Brussel) to companies in affected sectors could be deferred.

Other measures have been announced, such as (i) a one-off compensation mainly aimed for self-employed persons and small enterprises), (ii) measures in relation to subsidies and (iii) tax relief measures.

These announced measures are in the process of being, or will be, implemented by the Brussels government.


 

 

Q: My business is located in the Walloon Region. Can it rely on economic relief measures enacted by the Walloon Region in response to the COVID-19 crisis?

A: Yes, the Walloon Region has announced several measures to address the COVID-19 outbreak and its economic impact on companies and businesses located in the Walloon Region.

Companies to which a loan has been granted by a Walloon investment vehicle (i.e. SRIW (Société Régionale d’Investissement de Wallonie), SOWALFIN or Groupe Sogepa) may benefit from an extension of capital repayment. In addition, the measures taken by these entities include (i) the granting of additional public guarantees on existing credit lines and new short term facilities and/or (ii) the making available of loans with a fixed interest rate and a grace period for capital reimbursement, amongst others.

Other measures have been announced, such as (i) a one-off compensation mainly aimed at self-employed persons and small enterprises, (ii) measures in relation to subsidies and (iii) tax relief measures.

These announced measures are in the process of being, or will be, implemented by the Walloon government.


 

 

Q: My business is located in the Flemish Region. Can it rely on economic relief measures enacted by the Flemish Region in response to the COVID-19 crisis?

A: Yes, the Flemish Region has announced several measures to address the COVID-19 outbreak and its economic impact on companies and businesses located in the Flemish Region.

It will make available to companies, via PMV (the Flemish investment fund), an extra €100 million under its public guarantee scheme. Further, it has extended the guarantee scheme until the end of this year to finance debts of up to 12 months. As a result, in this crisis period, companies can also have a bridge loan guaranteed by PMV for existing non-bank debts of up to 12 months, whereas for the existing guarantee scheme this is only possible for up to 3 months. In addition, the cost of the guarantee for the company goes down by half to 0.25%.

As far as public guarantees of over €1,5 million under the Gigarant-scheme are concerned, PMV will take the situation of 31/12/2019 as a reference for the determination of the guarantees and the premium to be paid. Gigarant’s total guarantee capacity has also been doubled to €3 billion.

In addition, PMV will also make available subordinated loans of up to 3 years to SMEs. The aim here is to provide financing instruments that create a medium-term financial buffer, in addition to the shorter-term federal bridge loans.

Other measures have also been announced, such as (i) one-off compensations mainly aimed at self-employed persons and small enterprises, (ii) measures in relation to subsidies and (iii) tax relief measures. These announced measures are being, or will be, implemented by the Flemish government.


 

 

Q: Can my business rely on financial support or moratorium granted by the Belgian government?

A: Yes, under the auspices of the Belgian National Bank, the Belgian federal government and the financial sector have entered into an agreement in order to grant a temporary relief of payment obligations under existing credit facilities, and to ensure access to new credit facilities for financially viable enterprises. This agreement consists of two pillars:

(i) Deferral of payments under existing credit facilities

Enterprises facing liquidity issues due to the Corona-crisis can apply with their bank for a deferral of payments for the next six months.

On 31 March 2020, Febelfin has published a charter setting out the principles of the agreement reached between the federal government, Febelfin and the National Bank of Belgium on 22 March 2020.

Enterprises financially affected by the Covid-19 outbreak can apply for a payment deferral under their corporate credits for a maximum of 6 months. This means that enterprises will not have to repay principal for a period of maximum 6 months. Interest on loans remains due and payable. Once the deferral period has expired, repayment of principal will resume and the duration of the credits will be extended by the deferral period.

Payment deferrals of corporate credits may be requested by companies that are ‘non-financial enterprises’ (and also SMEs, self-employed persons and non-profit organisations) and that meet each of the following 4 criteria:

(a) facing liquidity shortages specifically due to the Covid-19 outbreak (e.g. due to a decrease in turnover);
(b) being permanently established in Belgium;
(c) not being in payment default in respect of its existing credits, taxes or social security contributions on 1 February 2020 or having incurred late payment delays of less than 30 days late with respect to existing credits, taxes or social security contributions on 29 February 2020; and
(d) having fulfilled all its contractual credit obligations with all banks during the last 12 months prior to 31 January 2020 and not undergoing an active credit restructuring process.

Payment deferrals may be requested for credits with a fixed repayment schedule, advances in current account and straight loans. Leasing and factoring fall outside the scope of application of the charter.

For applications submitted until 30 April 2020, a payment deferral for a maximum of 6 months may be obtained, i.e. until 31 October at the latest. For applications submitted after 30 April 2020, the deadline remains 31 October 2020.

Payment deferrals shall be granted free of charge. 

(ii) State guarantee scheme

The government has pledged a total amount of 50 billion EUR as part of a guarantee scheme to cover losses incurred by the financial sector because of a systemic lapse of loan repayments. The guarantee scheme applies to all new bank loans and credit facilities with a maximum maturity of 12 months granted from 22 March 2020 until 30 September 2020, both to non-financial enterprises as to self-employed entrepreneurs. This measure will again only apply to companies that can show that they were financially healthy and viable before the Covid-19 outbreak.

All new bank loans shall be subject to an interest rate of maximum 1.25% (excl. fees). New credit facilities up to 50 MIO EUR per company (or group of affiliated companies) will be guaranteed by the government; new credit facilities for an aggregate amount in excess of 50 MIO EUR will require additional approval. An important caveat is that the State guarantee scheme does not cover refinancings of existing loans.

Pursuant to the Act of 27 March 2020 (published in the Belgian State Gazette on 31 March 2020), the federal government has been authorised to implement the contemplated State guarantee scheme.


 
     
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   Financial services - regulatory
     

 

Q: Is there a ban on short selling in Belgium?

A: Yes. The Financial Services and Markets Authority (“FSMA”) has issued a ban which :

a. prohibits the “entering into a short sale which might constitute or increase a net short position on stocks admitted to trading to Belgian trading venues, including any transaction which creates, or relates to, a financial instrument and where the effect or one of the effects of that transaction is to confer a financial advantage on the natural or legal person in the event of a decrease in the price or value of another financial instrument, in accordance with Article 20(2) a) and b)” of the Regulation (EU) no. 236/2012 of the European Parliament and of the Council of March 14, 2012 (SSR);
b. applies regardless of the place where the transaction is executed (i.e. on a trading venue or OTC);
c. is applicable to all “companies listed on Euronext Brussels and Euronext Growth where the FSMA is the national competent authority for the most relevant market;
d. is applicable from 18 March 2020 until 17 April 2020.

Therefore, in our view the ban applies/may apply to :

a. new transactions entered into as from today
b. rolling transactions if they are executed as from today;
c. the effect on existing positions is less clear. On the basis of the wide definition of the ban, it is prohibited to execute a transaction, even pertaining to an existing position, if the effect (or one of the effects) of that transaction is to confer a financial advantage (on the person executing the transaction) in the event of a decrease in the price or value of another financial instrument. Keeping existing positions would seem permitted, provided that any transaction is avoided. We will try to obtain more clarity about this from the regulator;
d. to index-related instruments, but only if the restricted shares represent more than 20% of the index weight.


 

 

Q: Is an investor allowed to create a net short position (in one of the securities concerned by the short selling ban) using derivatives ?

A: No. Investors are not allowed to use derivatives to create a net short position; derivatives may only be used to hedge, create or extend a net long position. Note however, that, since the ban on short selling only refers to creating or increasing a net short position, net short positions may be kept or reduced where an investor has opened a net short position before the entry into force of the ban. On the other hand, increasing a position after having reduced it is not allowed.


 

 

Q: How shall investment firms comply with the MiFID II requirement on the recording of telephone conversations, where clients or staff lack the necessary electronic remote communication tools due to remote working?

A: In accordance with MiFID II, and the Belgian Law of 25 October 2016 on access to the activity of investment services and on the legal status and supervision of portfolio management and investment advice companies, investment firms shall keep a record of any investment service provided, any investment activity carried out, and any transaction carried out. Such recordings shall include the recording of telephone conversations and electronic communications relating, at least, to the provision of services concerning the reception, transmission and execution of client orders.

ESMA however recognises that, considering the exceptional circumstances created by the COVID-19 outbreak, some scenarios may emerge where, notwithstanding steps taken by the investment firm, the recording of relevant conversations may not be practicable (for example due to the sudden remote working by a significant part of staff, or the lack of access by clients to electronic communication tools).

In these circumstances, investment firms may use written minutes or notes of telephone conversations when providing services to clients, subject to prior information being provided to the client of the impossibility to record the call and that written minutes or notes of the call will be taken instead. In these scenarios, investment firms will need to ensure enhanced monitoring and ex-post review of relevant orders and transactions.

Investment firms should in any event deploy all possible efforts to ensure that the above measures remain temporary and that recording of telephone conversations is restored as soon as possible.

 
     
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