Brussels: COVID-19 Newsletter

9 Apr 2020

Dear clients,

The global spread of the coronavirus COVID-19 continues to cause significant uncertainty and disruption across our activities and our lives. First of all, we hope you, your family and friends are safe and well. Our thoughts go out to those directly affected by the continued spread of coronavirus. A special gratitude goes to all medical and civil protection staff and volunteers across the EU working tirelessly to fight the COVID-19 outbreak.

Coronavirus is affecting all activities in every sector and jurisdiction. Businesses in Belgium and elsewhere are trying to minimize the consequences of the virus and to survive to a potential economic fall-out. Nevertheless, while the companies are facing inevitable disruption, the Belgian authorities have under intense scrutiny all contractual relationship and obligations. To this end, you will find enclosed to our email the newsletter reflecting all current measures that Belgium federal government has adopted in response to the COVID-19 outbreak, including support measures for companies and self-employed people and their employees. In addition, the final section addressed the processing data protection of the employees under Coronavirus. We will not hesitate to keep you informed about any other further measures that may be adopted in the forthcoming days or weeks.

Evidently, home confinement cannot prevent us from continuing our work. In this regard, we want to ensure you that we are here to provide you with all our support, assistance and expertise to help you.

We are happy to serve you in these difficult times,

Yours faithfully,



Newsletter – COVID-19: Contractual related issues and force majeure

We have gathered in this newsletter all you need to know to protect your business

The coronavirus (COVID-19) outbreak is having a detrimental impact on commercial activities around the world. Restrictions on travel and gatherings have either been imposed in some countries, including Belgium and some businesses have already taken steps to limit business travel and participation in meetings and social events.

COVID-19 has been considered as a force majeure and consequently implies the suspension or termination by one party of the contractual obligations. However, the Belgian federal government has taken a holistic approach to ongoing contracts and has adopted measures to provide significant protection to business during these difficult times.

A) But first and foremost, let’s define what constitutes a force majeure?

The concept of force majeure derives from French civil law and has been exported to other civil law jurisdictions. This concept is frequently used in commercial contracts governed by different law systems because of the limited remedies otherwise available to the parties when the contract’s right and obligations become impossible, difficult or burdensome to perform due to events outside the affected party’s control. In order to determine whether an event is considered a force majeure, it is plausible to apply the objective test found in the relevant applicable law or in the contract itself.

Civil and contractual application of force majeure often differ in practice. For instance, its scope can be broader or narrow, depending on the negotiating power of the parties at the time the contract was concluded. While epidemics and even less pandemics are unusual in our times, recent past events of SARS, Ebola and various severe flu outbreaks should ring a bell. In some contracts, the term of “epidemic” or “pandemic” is listed as force majeure events and in others only the general terms such as “disease” or “illness” are used instead. Likewise, some contracts include a contractual list of force majeure providing at the same time remedies.

In cases where the person is directly affected by a disease, the key criterion adopted by the Belgian courts so far is whether the possibility of occurrence of the disease was foreseeable before the conclusion of the contract. In the affirmative, the diseased person bears the risks. If the event becomes foreseeable after the conclusion of the contract, then it has to be assessed whether the event renders the performance of the debtor’s obligations impossible. In the affirmative, the debtor may be discharged of their obligations.

Under Belgian law, the legal base of the force majeure can be found in the Belgian Civil Code (“BCC”):

  • Article 1147 BCC: “The debtor is, if there is a ground thereto, ordered to pay damages, either because of the non-performance of the obligation, or because of delay in performance, if he does not prove that the non-performance is the consequence of an extraneous event for which he cannot be held accountable (…).”
  • Article 1148 BCC: “No damages are due, if the debtor has become hampered through force majeure or fortuity to give or do that to what he had committed himself, or has done that which was prohibited.”

There is however, no exhaustive list of events that may be excluded for the purposes of Articles 1147 and 1148 BCC. Rather, the application of force majeure always depends on a case-by-case analysis. For an event to be a ground for release from contractual obligations, case law and legal scholars generally invoke two conditions to be fulfilled:

First, the occurrence of the event must have the consequence of making the performance of the contractual obligation impossible. This means that the event must constitute an absolute insurmountable impediment to the performance of the contractual obligation.

Second, the occurrence of the invoked event or the ensuing impossibility of contractual performance may not be due to or related to a fault of the debtor. Furthermore, the event and its consequences shall be unforeseeable and inevitable, e.g. the debtor was not reasonably able to prevent or avoid the event.

With regard to coronavirus situation, debtors are thus likely to be able to invoke force majeure on three main conditions:

1. The performance of debtor’s obligation became impossible because of the virus;
2. The parties concluded the relevant contracts before the outbreak of the virus and;
3. The debtor took all reasonable measures to ensure the performance of his/her obligations after the COVID-19 outbreak became known.

Book 8 of the new Civil Code has enshrined new rules regarding the burden of proof. In case of extraordinary circumstances, the court may determine who bears the burden of proof if the application of the general rules would be manifestly unreasonable (Article 8.4, al.5). The standard of proof for positive facts can be lowered if the specific nature of the facts at stake makes it impossible or unreasonable to prove them according to normal standards (Article 8.6, al.2). These rules will enter into force in November 2020, and it is very much possible to be applicable to the ongoing cases.

1. Hardship on proving a case in force majeure situations

Beyond the question of force majeure, companies could also consider whether there is hardship. Belgian courts habitually have rejected the doctrine of hardship, pursuant to which contracts should be adapted where unforeseen circumstances render their performance more burdensome to perform. However, in the framework of an intended reform of the Civil Code, a draft provision has been submitted to the federal parliament to introduce the doctrine of hardship into statutory law (Article 5.77 of the envisioned Civil Code). The parliamentary works on this issue have been suspended and the status of the reform is consequently uncertain. This draft provision is therefore not applicable to the current COVID-19 situation.

In the absence of a statutory provision, the practice to be embraced as soon as “force majeure hardship”) occurs, should be for the contracting party to send to its counterpart a timely notification of the force majeure situation with the aim to limit the consequences. This practice helps to ensure that all contractual procedures have been respected accordingly, and certain concessions do not lead to the waiver of certain rights or claims.

2. Good faith and fair dealing vs. abuse of rights

It is highly likely that under these unprecedented circumstances, some companies will try to take advantage to elude the execution of a contractual obligation, which would not have been fulfilled or would have been fulfilled late. If the contract does not contain a force majeure clause, general contract law applies. In that case, the principle of the performance of contracts in good faith and the obligation to mitigate the loss of the counterparty mean that there is an obligation to notify the co-contracting party of the suspension of the contract for force majeure.

3. Permanent and temporary force majeure

Under temporary force majeure, the debtor is temporarily discharged from the its contractual obligations without being liable. The renegotiation of the contract is always possible, whereas the suspension of the execution of the contract, is only possible -without incurring liability – in the event of a temporary and absolute impossibility to perform its obligations.

In case of permanent force majeure, the debtor is permanently discharged from its contractual obligation. No liability for his/her “contractual breach of contract” could be invoked. Consequently, the debtor is also be exempt from paying damages. In case the contract can still be partially executed, the execution of this part remains mandatory.

In any case, it remains of utmost importance for each ongoing contract to consult its specific and/or general terms and conditions.

B) Practical steps to be taken by business (to avoid disputes further down the line)

  • Take a holistic view of your contract analysis – check what clauses in the contract may be of help and don’t forget to consider your general clauses.
  • Start a meticulous dialogue with your counterparty about the current and potential impact on your relationship.
  • Keep records of all factual circumstances and decision-making so to obtain the necessary evidence and justify your actions should you need proof at a later stage.
  • Any changes to the terms must be done in accordance with the notification provisions in the contract for the course of action to be valid.
  • If you cannot fulfil your obligations and negotiations are not getting you anywhere, seek legal advice to ensure you do not compromise your own position.

COVID-19 is presenting overwhelming challenges on both the business and society. There is no ‘right way’ on how to manage the contractual challenge of COVID-19.  Thus, when carrying out contract reviews, always align with your wider business strategy. Any early engagement with contract counterparties and a collaborative behavior will obviously be far preferable to an adversarial approach. Each contract needs be looked at individually. Identify the relevant terms and assess the facts as they impact upon a party’s ability to perform its obligations.

C) Special Measures adopted by Belgium in response to Covid-19

The federal government has adopted several support measures for companies, employees and self-employed people. Further actions could still be taken in the coming days or weeks.

The current measures are aimed at temporarily reducing the financial costs for professionals in order to enable them to handle the current outbreak and, more particularly, temporary financial difficulties.

1. Tax payments

The Federal Tax Authorities (SPF Finance) have specified that all natural or legal persons with a company number (ECB) are concerned:

  • regardless of their sector of activity; and
  • who are experiencing financial difficulties resulting from the propagation of the coronavirus
  • and who can demonstrate this (a drop in turnover, a significant drop in orders and/or reservations, etc.).

The following taxes are concerned:

  • Withholding tax;
  • VAT;
  • Personal income tax;
  • Corporation tax;
  • Corporate income tax.

The support measures may consist of payment plans, exemption from interest on arrears, remission of fines for non-payment and etc. In order to benefit from these measures, the taxpayers concerned must make an express request to the relevant tax authority.

The Federal Tax Authorities have also announced to grant an automatic extension of the payment date for VAT and wage withholding taxes of 2 months. Consequently, these payment dates are automatically extended as follows:

Type of taxpayerVAT – extended payment dateWage withholding tax - extended payment date
Monthly return – February 202020 May 202013 May 2020
Monthly return – March 202020 June 202015 June 2020
Quarterly return – Q120 June 202015 June 2020

With regard to the payment of corporate income tax, personal income tax (resident and non-resident) and legal entities tax, the usual payment terms are automatically extended with a period of 2 months for all taxes assessed as of 12 March 2020.

Businesses facing financial difficulties as a result of the Coronavirus, regardless of their activity or sector, can additionally request tax and social security support measures from the Federal Tax Authorities, which should allow companies to bridge these temporary financial difficulties.

All Belgian registered businesses (both companies and independent workers) are entitled to these measures if it can be shown that they have incurred disadvantages from the spreading of the COVID-19 and the correlating measures, which can be either direct (e.g. significant decrease in turnover) or indirect (as a consequence of a chain-reaction). Companies which are in structural financial distress (i.e. companies already facing financial difficulties prior to the Corona outbreak in Belgium) can in principle not benefit from these measures.

Next to these specific measures, companies should also reassess their corporate income tax prepayment schedule: if the expected profit for the pending financial year will significantly decrease, the amount of the prepayments should be decreased accordingly. In addition, it could be considered to postpone the first tax prepayment (due on 10 April at the latest for companies having an accounting year starting 1 January) and (if necessary) make an additional prepayment in the second or third quarter.

With regard to cross-border employees, the income from employment is generally taxable in one’s ‘home’ state. However, employees which are active in a cross-border professional activities are often taxed in the country in which they are economically active, provided that a minimum amount of the professional time is effectively spent in that country. Specific arrangements have been made for employees commuting between Belgium and Luxembourg, and between Belgium and France. Employees commuting between Belgium and Luxembourg are taxable on their professional income in the work state if any professional activity physically carried on outside this work state is limited to a period of maximum 24 days, unless force majeure can be demonstrated.

In light of the current limitations on travel, the Belgian and Luxembourg authorities have expressed their intention to consider the present situation as force majeure. Therefore, the period spent by the employee in his home state for teleworking, will not be considered for the calculation of 24-day limitation. A comparable agreement has been reached between France and Belgium on the 30-day rule under the Belgium-France tax treaty. For both above cases, these measures are effective as of March 14 and applies until further notice.

Due to the coronavirus situation, the Ruling Commission is willing to provide a ruling confirming that the employer can temporarily give its employees, regardless of their job category, a tax-free allowance of up to €126,94 per month to cover the costs caused by teleworking, such as heating, electricity, paper and etc. The Ruling Commission has prepared a standard application for this.

2. Independent workers

Three types of measures have been adopted for independent workers facing financial difficulties due to Covdid-19. These measures concern the payment of the social security contributions, notably:

a) Deferment of payment and renunciation of surcharges

Independent workers and assisting colleagues may submit a written request to their social insurance fund to request a (one-year) deferral of the payment of provisional social security contributions for the 1st and 2nd quarters of 2020.

b) The reduction of provisional social security contributions

Independent workers can apply for a reduction in their provisional social security contributions for the year 2020 if their professional income is lower than the legal thresholds.

c) Exemptions from social security contributions

Independent workers can apply for a partial or total exemption from social security contributions, under the submission of a complete file on which a committee will decide.

d) Bridging benefits

Independent workers who are forced to temporarily close their business such as their shop, boutique, etc. will, under certain conditions, be able to benefit from the bridging benefit, i.e. a replacement income of 1,266 euros per month (1.582,46 euros per month in case of dependent children). The application must be submitted to the social insurance fund.

e) Regional measures

The Belgian Governments ordered that restaurants, bars, hotels and etc shall be closed, both on weekdays and during the weekend. Other businesses could remain open on weekdays.

  • The Brussels Region has set up a fund of €20 million which will make it possible to offer businesses and independent workers the regional guarantee for their applications for credit from banks. The government has also decided to provide aid to businesses as quickly as possible and is considering other measures, such as freezing regional and municipal trade taxes.
  • The Government of Flanders announced that businesses in the Flemish region can request a compensation. Businesses which are mandatorily closed entirely are entitled to a lump-sum compensation of €4,000 while businesses which can remain open on weekdays are entitled to a compensation of €2,000. If companies are required to remain closed after 4 April, they are entitled to an additional compensation of €160 per day. For business that are not obliged to close down but are affected by a turnover loss of at least 60% between 14 March and 30 April 2020, the government of Flanders provides a compensation premium through Flanders Innovation & Entrepreneurship:
    • A one-off contribution of €3,000 for individual workers. This would include also individual workers in a secondary occupation, provided that they pay social security contributions due to their levels of income.
    • A one-off premium of €1,500 for individual workers in a secondary occupation who have an income between €6,996.89 and 13,993.78.
  • The Government of Wallonia foresees a lump-sum indemnity of €5,000 for businesses and €2,500 for businesses that have to change their opening hours. These compensation payments are not taxed.

4. Temporary unemployment

The government has communicated that it will take measures regarding temporary unemployment for economic reasons and force majeure but not yet elaborated on the concrete modalities.

Due to COVID-19, two types of temporary unemployment can arise:

a) Temporary unemployment due to force majeure;
b) Temporary unemployment for economic reasons.

According to the communication of the Belgian unemployment agency (ONEM) of 9 March 2020, it can be assumed that it will be possible for employers to file for temporary unemployment allowances due to force majeure.

a) Temporary unemployment due to force majeure

The following cases are considered to qualify as the temporary unemployment due to force majeure:

  • When a worker has stayed in a country affected by Covid-19 and either cannot return to Belgium or is quarantined ;
  • When a Belgian company, affected by the consequences of the COVID-19 in a country at risk can no longer continue to employ staff because production has stopped.
  • When a company temporarily puts its employees out of work for economic reasons. Until the

procedure for recognition as a company in difficulty has been completed, it may invoke temporary unemployment for reasons of force majeure.

Under these scenarios, the employee will be entitled to an unemployment benefit of 65% of his or her capped salary (with a maximum of EUR 2.754,76 per month) until 30 June 2020. After this date, the amount of the temporary unemployment benefit will be increased to 70% of the capped average pay.

The employer who invokes force majeure must report this electronically to ONEM which is responsible for the exploitation seat of the company as soon as possible. In that case the company should note “CORONAVIRUS” as the reason of force majeure. In addition, a file should be send by post or email addressed to the temporary unemployment service of the competent unemployment office with an explanation showing that unemployment is caused by force majeure caused by the COVID-19 outbreak. Temporary unemployment due to force majeure is recognised within three to four days. ONEM had also published a FAQ relating to the terms and conditions of “technical” unemployment, which can be found here.

In case of difficulties, the employer can submit an application to the Minister of Work to be recognized as a company in difficulty on the basis of unforeseeable circumstances that in the short term will lead to a substantial decrease in turnover, production or the number of orders. In that case, the employer can apply for temporary unemployment for economic reasons to the competent unemployment office

b) Temporary unemployment for economic reasons

The unemployment for economic reasons can be requested by companies which, following the evolution of the coronavirus, are affected by a reduction in their clients, production, turnover, orders and etc.

Due to this situation the working regime is disrupted. In the case of manual workers, the employer must file an electronic declaration to the competent unemployment office, located at the employer’s place of business. The employer shall invoke “CORONAVIRUS” as an economic reason. The director of the unemployment office may grant an exemption from the introduction period if the reason of the reduction of work is the sudden spread of coronavirus.

With regard to employees, companies must already meet the preliminary conditions for the introduction of temporary unemployment for economic reasons for employees.  The employer must file an electronic declaration to the competent unemployment office, located at the employer’s place of business. The employer mentions “EMPLOYEE SUSPENSIONS” under the economic reasons and indicates “CORONAVIRUS” in the “remarks” field.

5. Use of employees’ personal data under COVID-19

Under COVID-19 emergency situation, companies are collecting and processing new types of information about individuals, including whether employees are displaying symptoms of the virus, the health status of employees and their close family ties, the results of any COVID-19 testing, and the various locations individuals have visited since the outbreak started.

A large proportion of the newly collected information will fall within the categories of “personal data” and “special categories of personal data”, the use of which is subject to strict compliance with EU General Data Protection Regulation

On March 19th, the European Data Protection Board (EDPB) adopted a statement related to  the safeguards of personal data processing in the context of the COVID-19 outbreak. The EDPB considered that unprecedented situation such as COVID-19 may legitimise restrictions of individual freedoms, if they are proportionate and limited to the event. For instance, if a company is about to take a decision on whether any staff  member should be self-isolating at home, it may be sufficient as first step to ask whether the relevant employee, or anyone within his/her household, is displaying symptoms of COVID-19. This approach is beneficial from a data minimisation perspective and also to avoid retaining detailed sensitive information about its employees, which would create a potentially significant compliance exposure. In addition, companies should ensure that the personal data of their employees are collected are stored only for as long as necessary.

Legal permission: Under GDPR employers and the competent public health authorities are permitted to process personal data in the context of epidemics, without the need to obtain the consent of the data subject. The processing of personal data is necessary for the employers for reasons of public interest in the area of public health or to protect vital interests (Art. 6 and 9 of the GDPR).

Legitimate interest: In the employment context, it may be necessary, if not imperative, for the employers to process data of their employees to ensure workplace health and safety obligations. However, legal restrictions by national authorities are possible, therefore the employer need to be compliant with these restrictions as well. For instance, the employer can perform employees’ medical check-ups, provided that the applicable national employment law or relevant health and safety law allows it. Employers are under obligation to inform the staff about preventive measures under COVID-19 and report cases. Nevertheless, the name and other details of employee(s) who contracted the virus could be revealed only under two conditions: (1) if strictly necessary for prevention purposes, and (2) the applicable national law so permits. In that case, the employee at issue should receive a notice and guidance on how to protect his/her dignity and integrity.

The EDPB also emphasised that even in these unprecedented times, personal data must be processed for specified and explicit purposes. Likewise, individuals retain the right to request and receive transparent information regarding the processing activities, including the applicable retention period for the collected data and the purposes of the processing.

In addition, companies are required to implement stronger security and confidentiality measures to avoid an unauthorized disclosure of data to third parties. More importantly, the EDPB requires documenting measures implemented to manage the COVID-19 emergency.

With regard to the processing of electronic data (e.g. mobile location data and etc), additional rules apply. The national laws implementing the ePrivacy Directive provide the possibility for data operators to use the location data but only when they are anonymous or after obtaining the consent of the data subject. This data used by the public authorities to generate reports on the concentration of mobile devices at a certain location (“cartography”).  For instance, on 29 March Google compiled and issued a report on mobility trends under COID-19 in different countries, including Belgium.


Google claims under its privacy policy that the data are processed anonymously and in compliance with privacy rules.


  • Strengthen remote working policies: Many companies are encouraging or mandating their staff members to work remotely. It is a perfect timing for companies to review and update their remote working policies, and to disseminate them amongst their staff.
  • Enhance data security: Maintain and enhance the security system and ensure that the deadlines for notifying data protection regulators of personal data breaches that trigger the notification requirement are met.


If you would like to discuss any of the issues raised in this anewsletter please contact us.