Context

On May 22, 2001, the Law addressing Employee Profit-Sharing & Capital-Sharing Plan (hereafter the Law) was enacted with a view to promote companies’ competitiveness. The entry into force of the Law is still subject to the enactment of several Royal Decrees.

Headline

During a seminar that was held on 12 October 2001 at U.C.L., Mr. Jean-Paul Servais, Head of the “Cabinet of the Minister of Finance” announced that all measures will be taken so that the Law may become effective for accounting years ending as from 31 December 2001.

Mr Servais announced that not less than four Royal Decrees (RD’s) would be enacted in the coming weeks and certainly before year end.

• Two of these RD’s would deal with the application of the Law in a group context (definition of the concept ‘group’ and method of determination of the applicable ceilings on a consolidated basis).
• A third RD would foresee the possibility for a non-traded company – willing to set up a Capital Sharing Plan – to obtain a ruling with respect to the valuation method of the company stock.
• A last RD would define the ‘objective criteria’ that are permitted to differentiate the allocation of the participation among various categories of employees. The National Labour Council should have been invited to make a proposal within the shortest possible time.

Application

Provided the aforesaid measures are enacted in due time, companies could then decide to begin the implementation of Employee Participation Plans and decide to allocate part of their profits for the financial year ended on December 31, 2001 under the favoured tax and social security treatment provided by the Law.

Source : Mr. Jean-Paul Servais, Head of the “Cabinet of the Minister of Finance” – Seminar “La participation des travailleurs au capital et aux bénéfices des sociétés” held at the UCL on October 12, 2001.