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The social and fiscal status of 'self-employed students'

A new legal statute for self-employed students (Dutch: ‘student-zelfstandige’) came into force on 1 January 2017.

This legal status is not the same as the university’s own ‘student entrepreneur’ status (Dutch: ‘student-ondernemer’).

Benefits of the legal status?

If your income stays below a certain threshold, you can take advantage of attractive social security regulations and remain a dependant of your parents when it comes to health insurance, family allowance payments and taxes.

Conditions

The conditions for obtaining the social and fiscal status of a self-employed student are as follows:

  1. You are aged between 18 and 25. You can be registered as a self-employed student from the quarter in which you turn 18 until the end of the third quarter (30 September) of the year in which you turn 25.
     
  2. You are enrolled at an accredited Belgian educational institution or an international educational institution whose programme has been recognised by the competent authorities in that country.
     
  3. You are studying in order to obtain a degree (diploma). In principle, students enrolled on exam and credit contracts are also eligible.
     
  4. Your study programme is worth at least 27 credits (or 17 hours of classes per week). Exceptions can be made if you are not taking courses worth 27 credits in your final year and you haven’t yet submitted your final assignment or internship report. In that case, you can still apply until you submit your final assignment or internship report, but you must apply before the end of the academic year (your final year).
     
  5. You attend classes regularly. This means that you must be able to submit a certificate proving your attendance during classes or participation in examinations (except in the case of force majeure), or proof that the educational institution supervised you during an entrepreneurial project.
     
  6. You are self-employed and do not work for an employer (or you intend to become self-employed).

International students who meet all of the conditions are also eligible for self-employed student status.

How do you obtain this status?

You will need to apply for the status yourself through a social insurance provider. The application can be made on paper or online. You are free to choose which social insurance provider you use. You must be affiliated with a social insurance provider before you start your enterprise. You will find an overview of all social insurance providers at http://www.rsvz.be/.

Which documents are needed to complete the application?

The social insurance provider will provide you with an application form.

In the application form you must declare that you will attend classes regularly (separate declarations for ongoing and subsequent academic years).

The social insurance providers use the family allowance register to check that you are enrolled at an accredited educational institution and are taking 27 credits/17 hours’ worth of classes. In exceptional cases, a certificate of enrolment may be requested. At the end of the school or academic year, the educational institution must confirm that you have attended classes regularly.

This confirmation can take the form of a certificate of attendance during classes (not normally certified) or of participation in exams worth at least 27 credits or 17 hours of classes. If you were prevented from attending classes or exams due to force majeure, you will need to provide proof of this.

If the educational institution is supervising you during your entrepreneurial project, a certificate showing this is sufficient and you will not need to prove your attendance during lessons or exams. However, the FPS Social Security only accepts this certificate if you have also obtained the university’s own ‘student entrepreneur’ status.

When is the status allocated?

You receive the status of self-employed student in the quarter you submitted the application or the quarter you specified in the application.

Do you have to apply for the status every academic year?

No, the application remains valid for subsequent academic years as long as you still meet the conditions.

When does the status end?

Self-employed student status ends:

  • when you no longer meet all of the conditions (for studying or being self-employed)
  • when you graduate; note that this is not necessarily the end of the academic year:
    • if you graduate in June, you can retain the status during the third quarter
    • if you graduate in January, the status ends when the first quarter starts (because you no longer meet the conditions as of that quarter)
  • no later than 30 September of the calendar year in which you turn 25 (if you turn 25 in the middle of the academic year, you can retain self-employed student status until the end of the academic year).

Consequences for social security

As a self-employed student, you can benefit from attractive contribution regulations:

  • You do not have to pay social security contributions if your annual net taxable income (gross taxable income minus professional expenses) is lower than 6775.25 euros (all figures for 2018).
  • You pay a reduced contribution of 20.5% on any income between 6775.25 and 13,550.50 euros.
  • If your net taxable income is higher than 13,550.50 euros in 2018, you will pay the same social security contributions as all other self-employed people (whose business is their primary occupation) on your full self-employed income. In that case, there is no exemption on the portion of income up to 6775.25 euros

Please note: if you do not report your estimated income, you will pay a lump-sum provisional contribution of around 80 euros per quarter during the start-up phase (the first three full years). If you have a clear idea of ​​what your income will be, you can ask to have the contributions increased or decreased, taking the thresholds above into account.

Consequences for health insurance

If you pay social security contributions as a self-employed student under the new statute, you will establish your own ‘rights’ to health and disability insurance. If you pay reduced contributions or no contributions at all, you will be covered by your parents’ insurance.

If your income stays below 13,550.50 euros, you will not establish your own rights in the health insurance system. You then remain dependent on your parents for medical care. Under certain conditions, paying reduced contributions can trigger the probationary period for incapacity insurance. When your income exceeds 13,550.50 euros, you accrue the same social rights as someone who is self-employed as their main occupation.

Consequences for family allowance

As a self-employed student, you automatically retain the right to receive family allowance payments if you do not pay social security contributions. If you do pay contributions, you must declare the number of hours you worked per quarter. If you can prove that you have not exceeded the limit of 240 hours, you are still entitled to receive the family allowance. If you combine your self-employed activities with student work, your family allowance may be affected if you work more than 240 hours per quarter in total.

Consequences for taxes

You can remain a dependant of your parents for tax purposes if you meet certain criteria:

1. Being part of the family

In order to be recognised as a dependant for tax year 2018, you must have been legally domiciled at your parental home on 1 January 2018.

2. Not receiving wages that are expenses for your parents’ business

Perhaps your parents are self-employed and you help them with their business during the holiday. If your wages are deducted from their income as a professional expense, you can no longer be considered their dependant. Certain rules also apply if you are paid or remunerated by a company that your parents work for. Contact your social insurance provider for more information.

3. Limiting your net resources

If you want to earn a bit of money as a student, you run the risk of no longer being considered dependent on your parents for tax purposes. It is very important to find out whether this is the case, as parents who have dependent children are entitled to a tax reduction. The reduction increases with each child who is still dependent.

In order to be considered a dependant for tax purposes in 2018, your net resources in 2018 may not exceed 3270 euros. If you are the child of a single parent, a higher limit applies, namely 4720 euros.

You can calculate your net resources as follows:

  • First, add your gross taxable income from self-employment (i.e. your gross income minus the social contributions you paid) to your gross taxable income from contractual employment.
  • If you have worked under a student contract and/or the self-employed student status, you can deduct a maximum of 2720 euros from the total gross taxable income you have earned.
  • If you have received maintenance benefits, these must be added to the total. There is an exemption of up to 3270 euros, however. In the final step, reduce the amount by 20% – this is a flat-rate expenses deduction. The final amount is considered your ‘net resources’.

More information is available from your social insurance provider or at www.rsvz-inasti.fgov.be/en