Report Topics:
1:- General Information
2:- Cooling-off Period
3:- Pyramid Schemes
4:- Multi-Level Marketing
5:- Prohibition on Products
6:- Credit Restrictions Country
7:- Money Collections
8:- Licenses
9:- Status of Direct Sellers
10:- Earnings Claims
11:- Taxes and Fees
12:- Social Security
13:- Others
General Information
information
Cooling-off Period
Consumer protection provisions are defined in the Law of July 1991 on commercial practices, consumer protection and information. This law provides for a compulsory cooling-off period for sales made to a private consumer (non-professional use), for distance selling (mail order, telephone selling, computer selling) and for sales made away from business premises.
The cooling-off period is not compulsory when the consumer makes a prior and express request (a telephone call does not constitute such a request). The company must provide proof of the consumer’s prior and express request.
The cooling-off period does not apply to cash sales made at trade fairs and exhibitions for amounts under BEF8600.
For sales which fall under this law there must be a contract in writing, a copy of which is given to the consumer at the latest moment when the order is made. This contract must include a cancellation clause corresponding to the terms of the law, failing which the contract is null and void. This clause must be mentioned on the recto of the first page of the contract and in a box distinct from the rest of the text.
The consumer does not have the right to refuse the protection given by law. The right of cancellation must be exercised by registered letter sent within seven (7) working days from the day after the order is given. Cancellation is free of charge to the consumer.
Pyramid Schemes
Pyramid selling and assimilated schemes are prohibited by Article 83 of the law on commercial practices, consumer protection and information.
Chain Selling — A system establishing a network of sellers, professional or not, where each seller hopes for some benefit resulting from the expansion of this network rather than from the sale of products to the consumer.
Snowball Selling — A system of offering products to the consumer by having him think that he will obtain them free of charge or against an amount lower than their real value, on condition that third parties buy vouchers, coupons or the like, or to get memberships or subscriptions.
Multi-Level Marketing
There is no definition of multi-level marketing in Belgium. Subject to what has been said in the previous section on pyramid selling, multi-level marketing is not prohibited. It is generally carried on by independent workers. Particular attention must be paid to the chain of sub-ordination that may be established between the different levels and the risk that the courts may re-qualify independent workers as salaried workers.
Prohibition on Products
The decrees applying the law on canvassing activities prohibit the sale of certain products for certain types of sales. The main prohibitions are the following:
General prohibition:
Stocks and shares of any kind, even those quoted on the Stock Exchange.
Prohibition of ambulant trading, ie, in public markets, door-to-door sales and in public places:
– pharmaceutical products
– drugs and medicinal plants
– medical, orthopaedic and electro-therapy apparatuses
– optical articles and instruments
– precious metals and items manufactured therefrom
– precious and semi-precious stones
– real pearls, including cultured pearls
– weapons and ammunition
– spirits
Prohibition of door-to-door selling and in public places:
– electrical apparatus and accessories other than electrical household appliances
– radio-electrical apparatus and accessories
– lights
– artificial jewellery
– textile products
– leather articles
– shoes and products to manufacture / repair them
– fancy leather goods
– clock and watch making articles
– items for smokers
Prohibition of door-to-door selling:
– seeds and plants
– wine
– grocery products
– bakery products
– fresh meat
– meat preparations, frozen or not
– second hand goods.
Credit Restrictions Country
Canvassing in the home or residence of the consumer to establish credit contracts is prohibited unless the lender or intermediary goes there at the consumer’s express and prior request, for which the lender or intermediary must provide proof. Telephoning a consumer to suggest a visit is considered to be canvassing.
Canvassing for credit contracts at the workplace of the consumer is prohibited as well as canvassing and offering contracts to the consumer at another consumer’s home.
It is prohibited to offer a consumer a contract of credit during a trip organised by or on behalf of a salesman or provider of services, the main purpose being to persuade the consumer to acquire goods or services, unless this purpose is clearly and previously announced to the consumer as being the main purpose of the trip. The law only applies to consumer credit contracts and therefore does not apply in the case of commercial, professional or handicraft use.
The law is not applicable when the consumer has to repay the credit in a maximum of three instalments, not including the down payment, and in a period of time not exceeding nine (9) months. If the consumer has first asked for credit, the offer is subject to cancellation, valid during seven (7) working days from the day the contract is signed. Where credit is granted, a down payment of 15% of the purchase price is compulsory.
Money Collections
In the case of sales away from the sales person’s place of business, it is prohibited to demand or accept, under whatever form or pretext, a deposit before the end of the cooling-off period. This clause is applicable even in cases of immediate delivery of the goods. Under the law on consumer credit, a deposit of 15% is compulsory for credit sales, in which case it must be specified that the deposit is made in accordance with the law on consumer credit.
Licenses
Persons working as resellers or sales people on commission need to register with the Registre de Commerce. For ambulant activities, other than home parties, sales people must obtain an ambulant trader
>card from the Ministry of Middle Classes, via the Administration of the commune where they live. The ambulant activity can only begin once this card is obtained. No particular authorisation is necessary for party selling.
Status of Direct Sellers
There are two (2) categories:
Salaried
>The salaried seller is under the employer’s authority through an employment contract. There is a minimum salary fixed by law and generally payment of commissions. The employee may be employed full or part time. This status is generally expensive for the employer.
Independent
>For independent status there must be no chain of subordination and the employer may not supervise, manage or exercise authority over the independent seller, nor have the possibility to do so. One must avoid any sign that would lead to the belief that there is a chain of subordination. The independent person must be free to exercise other non-competitive activities. He cannot be obliged to submit reports, have obligatory training imposed upon him or be bound by fixed hours or holiday dates.
>The independent sellers’ activity may be exercised in different ways – as dealer, buyer-seller or on a commission basis. The independent seller is responsible for all charges incurred by his social security and fiscal status.
Earnings Claims
No legislation.
Taxes and Fees
Employees
Employees have the social security status of salaried workers. An amount of 13% is retained and paid by the employer for social security on the gross income. Fiscally, the employer must retain from the gross income, a professional deduction between 30-40% according to income.
Independents
Independent sellers cover all their own charges for social security, being 16% of gross income, payable quarterly. Amounts may be reduced, possibly cancelled, if the activity carried out is complementary. The independent seller is responsible for his own income tax. If his income is considerable, he must pay quarterly.
Companies
Companies must pay for their employees 35% of complementary charges on gross income. No social security or income tax is retained on behalf of independent sellers. Belgian companies are re-taxed on income as follows:
> – 28% for the first BEF million
– 36% for BEF 1,000,000 – 3,600,000
– 41% for BEF 3,600,001 – 13,000,000
– 39% for amounts over BEF 13,000,000
VALUE ADDED TAX (VAT):
Companies
All sales are subject to VAT. Commission paid to intermediaries are also subject to VAT. The normal rate for the majority of products is 19.5%.
Buyer-Resellers
The buyer-reseller pays VAT on the purchase of products, collects VAT on the sale and pays the difference to the administration. He can also deduct the VAT paid in the course of his professional activities, provided that is subject to VAT which is applied only when turnover exceeds BEF 250,000 per annum. Where VAT is levied, the buyer-reseller must make periodical returns, usually quarterly.
Persons on Commission
Persons on commission must apply VAT on the amount of commissions and pay it to the administration. The method deduction for VAT payable on pursuit of a professional activity and for franchise systems is identical to the method applied to buyer-resellers.
Social Security
See previous section.
Others
No information.