Laura Van Gompel  – October 2021 – Data protection (and processing) is not always part of the due diligence in M&A transactions. However, a data due diligence can reveal non compliance of the target company with the GDPR and thus additional risks for the buyer. Specific warranties on data protection and future liabilities or penalties are needed to protect the buyer.

An assessment on the GDPR compliance of the target entity should be construed as early as possible in the M&A process: not only to identify (and idealistically minimize) future liability of the target company and/or the new owner, but also to ensure that the transaction itself is GDPR compliant.

Involved parties do best to check (and possibly extend) their data protection statements in order for the transfer of personal data to third parties to be covered, specifically for purposes of due diligence, deals concerning asset disposal, restructuring or merger or sales. For example: clientele data base, including contact data and historical & actual generated revenue, preferrable partnerships, suppliers, etc.

Possibly, some data processing agreements might have to be amended or foreseen as well, for the same reason. For example with the provider of cloud services and/or the data room.

The information that will be shared in the data room should moreover be selected carefully and be “technically” prepared as well. It might be necessary to (partially) anonymize, pseudonymize or aggregate certain data. The data room itself should be located in a safe, confidential “technological place”. Access control, login control and selective user rights (allowing users to only access specific and for them relevant information in the data room) are recommended.

These steps should allow the legitimate and lawful transfer of personal data in the run up to the transaction, for example during due diligence.

Furthermore, the data protection and processing policy of the target entity should be assessed in detail. Amongst others, the following items shall be at stake:

  • Which is the legal basis for the existing processing flows?
  • For which purposes are the personal data processed?
  • How are data breaches or GDPR rights of data subjects dealt with?
  • How is data retention and data security handled? Are there policies in place or certificates obtained?
  • Is there an appointed DPO?
  • Which warranties are offered for data transfers outside the EEA?
  • Which protective technical and organisational measures are implemented?
  • Are all (labour, supply and service) contracts GDPR compliant?

Very often the data processing register shall be the starting point of this analysis, which shall be a joint effort of lawyers, ICT department, DPO’s and divisional heads.

Should a contingency be identified, the seller and/or target entity might still solve a thing or two during the pre-closing phase. However, often it will need more than a one-time effort, even after the deal is closed. Buyers shall therefore do best to stipulate specific warranties in their favour.

At Van Gompel Advocaten (VGA), we are happy to assist you on any data protection matter, including for M&A transactions.

0032/(0)11 281 280



Feel free to contact Anton Van Spaendonck for more information.


Hans Van Gompel – October 2021 – Those who are not familiar with M&A contracts are often surprised that a major part of the contract is dealing with the so-called ‘Representations and Warranties’. Often, these ‘Representations and Warranties’ are drafted in a specific enclosure. Its likely they have more pages than the contract itself, the question raising: why?

The answer is connected to the way many of these M&A transactions are structured.

They are to be seen as a transfer of company shares from one (previous) owner to another (new) owner; the primary purpose of such transaction being the shares themselves. The corresponding share purchase agreement (SPA) enhances the sale-purchase of these shares and their transfer of title. Within this strict scope, the liability of the seller to the buyer is limited to the shares themselves, that is: a peace of paper or a mere transcription in a share register. The seller shall bear no – automatic – responsibility regarding the underlying target company, its finances neither profitability.

However, it is obvious that the buyer in such transactions is interested in obtaining control of the target company and its business activities, in exchange for payment of share price. In addition to opportunities, these activities imply (a lot of) risks. As previous owner, the seller knows these risks much better than the buyer (even if the latter has duly performed a due diligence investigation).

‘Representations and Warranties’ in the SPA provide the buyer with a contractual protection against such (unknown, difficultly measurable) ‘company’-risks, as they will include guarantees regarding a.o.:

  • legal and financial status of the target company;
  • quality of its assets and debts;
  • (payment) obligations regarding employees, social security and taxes;
  • status and value of IP, insurances, commercial contracts, public licenses, environmental obligations;
  • contingencies and potential hazards (such as pending litigation).

The ‘Representations and Warranties” substantially enlarge the possible liability of the seller towards the buyer. They go further than the mere “shares”.

Negotiations on these ‘Representations and Warranties’ are therefore often complex and delicate, given the clear conflict of interest between parties: the buyer wants to protect himself as much as possible, where the seller wishes to keep his liability rather limited (or even excluded).

It is recommended for both buyer and seller to count with high end advice, not only legal, but also financial and business wise.

Do you have a pending or proximate M&A transaction?

Do not hesitate to contact VGA at +32 (0)11/281.280 or

Eric De Wilde – October 2021 – Imagine. You are about to buy a bakery store in the centre of the city. Next to the store there is a large school. This store is worth its price because of its recurring (school) clientele. All of a sudden the whole country goes in lock down: no pupils, no teachers anymore… In one week time your approaching acquisition seemingly lost its purpose.

Or even better, in the run-up to your bakery purchase, you find a better opportunity: a bakery store with an excellent location, at the border of a corporate zone. Lot’s of office workers and salaryman who will buy your sandwiches. However, you have already committed to purchase the bakery store in town.

For this reason all share purchase agreements or promises to purchase should contain a material adverse change clause (also called MAC clause). A MAC shall allow (mostly) the buyer to cancel an ongoing acquisition in the run-up to the closing.

There is a huge variety of MAC’s. One way to oversee this variety is to consider the extent in which parties are involved.

MAC-clauses can cover situations out of control of the parties. Examples are a changed market, hazards in the world economy, external events with an impact on business, such as a pandemic as in the first example, terrorist attacks, hazards of nature, etc.

These clauses can also cover situations, partially or fully, in control of the parties, that are related – even indirectly – to the target company. Examples are: breach or non-obtaining of a financial covenant (such as redefining the financial structure of the target company), failure to obtain or to retain an industrial licence or soil certificate…

There are also situations where parties wish to undo the contract in very specific, personal, conditions, which might even have nothing to do with the target company neither impact on it. You find a better offer (see the second example above), certain stakeholders lack to approve the deal, etc.

As the seller also wants certainty, sometimes a reverse break-up clause is combined with the MAC’s. This allows the buyers to break up the deal, in exchange for paying a break-up fee to the seller.

MAC clauses are crucial instruments to cope with material adverse changes– of any kind – that undo the attractiveness of a deal.

At Van Gompel Advocaten (VGA), we are happy to assist you on any M&A related matter, including drafting of SPA’s. |+32 (0)11/281.280

Found out how Maarten Toussaint and Matthias Koopmans experienced their summer internship at Van Gompel Advocaten (VGA).

Maarten Toussaint – 23 September 2021:

“This summer I chose (once more !) for a summer internship at Van Gompel Advocaten.

The firm focuses on broad corporate law (including GDPR). As a summer intern you get to be involved in a wide variety of cases. You are challenged to immerse yourself in contract law, company law, GDPR and the related legislation or even procedural rules.

The reason why I opted for an internship at Van Gompel Advocaten this summer is because it allows you, as an intern, to make big improvement in several areas of your development towards a future lawyer role.

As an intern at the firm, you actually get to be assigned with relevant (!) tasks, such as research, drafting letters, etc. Master Hans Van Gompel and the other lawyers then work further on the solution / draft that you have come up with. You will receive an explanation and feedback and you get to be remain involved in the further settlement of the case/question.

Moreover, VGA tries to involve the trainees as much as possible in the contact with clients (with their consent). In this way you will experience the dynamics of such a contact/conversation. The file you are working on is thus not limited to a bundle of papers. It gets real.

Mr. Hans Van Gompel also takes plenty of time to give you feedback or make adjustments as an intern. With his years of experience, he can give you as a student a more intellectual and practical view and you are regularly encouraged to come up with a more pragmatic solution.

Finally, the internship also offers an opportunity to develop your social skills and build a network. There are often other summer students at the firm that you can work with. In addition, there is also a friendly atmosphere in the office, which makes everyone very accessible.

I can only advise every student reading this to start a summer internship at VGA. Progress as a legal practice and as a person is guaranteed.”


Matthias Koopmans – 24 September 2021:

“In September 2021 I had the opportunity to get a taste of the law profession at Van Gompel Advocaten. Under the guidance of Mr. Van Gompel, I saw my course books and legal texts come to life and interact with our multifaceted society.

Thanks to this interaction, the importance of basic concepts was once again emphasized, the skills to discover the relevant legal questions from a statement of facts sharpened. I was also able to finetune a certain finesse necessary to conduct research in niche legal matters. Every day was a new experience.

It was always relaxing and fun to get to know the other colleagues over coffee (and the occasional cake) in the afternoon, as well as hearing about their experience and getting to know them better on a personal level.

It is with satisfaction that I look back to the internship, about my own achievements and the cooperation that was offered to me!”


Anton Van Spaendonck – September 2021 – In a recent judgement of the Commercial Court of Antwerp the liquidators of a bankrupt Belgian company sued the Dutch shareholder of this company to pay the full capital (now initial capital) and to settle his checking account. The Belgian judge however did not have the international jurisdiction to rule in this case.

General aspects of the case

The general rule holds that claims that arise directly from bankruptcy can only be instituted by the liquidator of a bankrupt company. Any claim which can be brought by the company itself, outside of bankruptcy, is no claim that arises directly from bankruptcy. As such, it does not fall within the scope of application of the Insolvency Regulation.

Given the fact that the recovery of unpaid capital and the settlement of checking account debts are not claims that arise directly from bankruptcy, the court decided that the Insolvency Regulation does not apply. Hence, the jurisdictional rules of the Insolvency Regulation do not apply.

How should jurisdiction be determined?

The court examined whether the claim at issue fell within the scope of Brussels Ibis.  In this respect, the judge relied on the Gourdain case of the Court of Justice: all claims that are brought by the liquidator in a bankruptcy, in the sole name of the bankrupt and that are based on a different legal basis (law or legal act) than bankruptcy, are covered by the Brussels Ibis Regulation.

The claim at issue thus arises from the shareholders’ commitment to the company. Therefore, Article 7, 1, a Brussels Ibis is applicable. However, there was no international jurisdiction for the Belgian Court in application of Art. 7.1.a) of the Brussels Ibis Regulation.

Art. 7.1.a) of the Brussels Ibis Regulation provides international jurisdiction for the court of the place where the obligation giving rise to the claim was performed or is to be performed.

In line with the Tessili case, the place of performance of the obligation at issue was determined by the court on the basis of the applicable law. The characteristic performance consisted “in the payment of an obligation (originally) entered into by the partner with a Belgian company”. As a result, Belgian law was applicable.

Under Belgian law, debts are to be collected by the creditor at the debtor’s location (Art. 1247 of the Civil Code). Thus, the payment was to be executed in the Netherlands.

Thus, the Dutch shareholder must be summoned to the court of the place where the obligation underlying the claim was performed or is to be performed. As such, the Belgian courts could not rule on the action for the recovery of a current account or the payment of the capital against a foreign debtor.


On one hand, for a (bankrupt) company, it is recommended to include a clause in the articles of association stipulating that all payments to the company must be made at its registered office in Belgium. All payment claims of the company against current and future shareholders will then have to be executed at that office.

Of course, a general jurisdiction clause in the articles of association can also be provided, stipulating that all disputes, not just payment claims, concerning the company must be brought before the judge at the company’s registered office.

On the other hand, when dealing with a foreign shareholder of a (bankrupt) company and no jurisdiction clause is present, a careful consideration as to where your claim should be filed is essential. You will be subjected to the international jurisdiction by virtue of Brussels Ibis.

So do make sure to negotiate a jurisdiction clause which is favourable to you, in the specific (loan) contract or in the articles or association. If no such clause exists, in Belgium a claim for payment from a foreign shareholder will not be possible before the Belgian courts.

Hans Van Gompel and Anton Van Spaendonck wrote a commentary about the judgment in the periodical Limburgs Rechtsleven (H. VAN GOMPEL and A. VAN SPAENDONCK, “Internationale rechtsmacht voor geschillen omtrent de volstorting van het aanvangsvermogen of terugbetaling van een rekening-courant door een buitenlandse aandeelhouder – Het nut van een statutair bevoegdheidsbeding”, Limb.Rechtsl. 2021, 148-152). You can find the PDF version of the published judgment of 1 February 2021 with the above contribution here.


Elise Strauven – September 2021 – If you are a self-employed natural person (freelancer, company director, independent professional or a single-person business e.g.), your personal and business assets are mixed. There is no (automatic) asset-partitioning. You have unlimited liability. Your personal assets therefore also serve as collateral for your professional creditors, who can for example recover from your primary residence.

Filing a declaration of non-seizability can, however, protect such primary residence against seizure by your professional creditors. This declaration installs a kind of asset-partitioning regarding the primary residence and ensures as of its date of registration that potential future creditors of your business activity will not be able to seize your primary residence.

For whom?

By the Act of 25 April 2007 , the Belgian legislator allowed the protection of the primary residence of a self-employed person against seizure by commercial creditors.

This applies to natural persons who exercise a self-employed activity in Belgium as main or secondary occupation or after retirement, including not only self-employed entrepreneurs, but also practitioners of a liberal profession and company managers (e.g. director, managing director or daily manager).

For which property?

The protection extends to the immovable property where the self-employed person has his primary residence, that is where he and his family habitually live (e.g. their home).

It only concerns a residence that is owned in full property, usufruct or leasehold. A primary residence which is rented, cannot benefit from this protection.

Immovable property used both as a primary residence and for business purposes may receive (certain) protection as well. If the surface used for business purposes is less than 30 % of the total surface of the property, the entire property may be protected and declared exempt from seizure.

For lower rates, only the area serving as actual residence may be declared non-seizable, on condition that the areas are officially allocated in articles (of co-ownership) .

The non-seizability of the property covers its entire living area, calculated over all the floors, and the surface of the land on which it is build.


The declaration must be made by notarial deed and it should be registered at the mortgage office (of the district where the property is located). The deed with the declaration, the mortgage registration and administrative costs amount to approximately 1.000,00 EUR.


From the moment of its registration in the mortgage, the declaration takes effect: the professional creditors can no longer seize the protected property for enforcement purposes. The residence can no longer be sold to obtain payment from the proceeds. However, a protective seizure always remains possible.

Protection against?

The non-seizability protects against purely professional creditors for debts incurred after the declaration of non-seizability.

In other words, the protection does not apply to:
– The debts resulting from a crime, even if they are related to the business activity of the self- employed person;
– Debts of a mixed nature, relating to both personal and professional life;
– The liability of the self-employed director for obvious gross negligence that contributed to the company’s bankruptcy;
– Private debts.

If you are a director of a company, the protection will often arise in the context of director’s liability or an outstanding current account debt.


In case of bankruptcy, change or cessation of the self-employed activity, the declaration of non-seizability shall continue to have effect.

The same applies when the residence is sold to acquire another one, but only if certain conditions are met (which transcend the scope of this article).

The declaration shall be revoked when the self-employed person passes away. However, professional creditors at the time of the declaration can still not claim their debts from the heirs.

In case I move?

Be aware that the protection ceases if the property is no longer used – even temporarily – as the ‘primary residence’. If the self-employed person moves out from the protected property to later return to it, the initial protection is not automatically restored. A new declaration of non-seizability shall be needed.

Jari Vermeulen and Laura Van Gompel – September 2021 – It is possible that your business partner does not honour the commercial deal you both made (for example, to deliver certain merchandise on a due date). Under Belgian law, you are then entitled to temporarily defer your own related obligations (for example, to pay the merchandise). “temporarily” meaning: until your business partner complies again.

This remedy tool is called “the exception of non-performance” (ENAC) and is triggered when your business partner has actually failed to perform the contract. In the example, the buyer protects himself by withholding payment, as the underlying merchandise has not been delivered yet by the supplier, in breach of contract.

Often, however, the breach of contract is not yet a fact. Nevertheless, may there be clear indications that your business partner shall not comply at the end.

  • Example: You have to deliver merchandise. You know for a fact that your buyer-commercial partner is facing cessation of payment or seriously interrupted cash flow. In other words, it is likely that you will not receive payment as agreed for the merchandise that you ought to deliver.
  • Example: Your business partner has informed you that this months’ delivery of finished product will not proceed as planned. He was not able to make advance payments for raw materials. You shall need to supply with another provider.

Also in these cases, you can (temporarily) postpone compliance with your own obligations, in virtue of the so called “exceptio timoris” or the “Exception of fear”. This exception allows you to protect your assets by way of anticipation, as a preventive measure, before the breach of contract is accomplished.

Please note that the exceptio timoris is not (yet) accepted as general principle of law in Belgium (*). You need to include this remedy explicitly in the underlying commercial contract. You are best to specify the situations in which it shall apply (for example, cessation of payment or involvement in an insolvency procedure) and under which conditions (for example, after written notice to the business partner-debtor or when there is no additional collateral, such as payment in advance or bank guarantee).

(*) The exceptio shall most probably be acknowledged in Book V “Contract law” of the New Civil Code for Belgium (Nieuw Burgerlijk Wetboek).

The exceptio timoris, the smaller brother of the exception of non-performance (or is the other way round (?)), is a very relevant protective, anticipatory tool; even more so during uncertain (pandemic) times. Should you need any assistance with the drafting or revision of your contracts, feel free to contact us.

Eric De Wilde – September 2021 – For companies fearing bankruptcy in Belgium, the procedure of court-supervised reorganization (“Gerechtelijke reorganisatie”) exists. The Covid-19 pandemic raised awareness that more measures are required to protect companies against bankruptcy. It led the Belgian government to experiment with a prepackaged bankruptcy inspired by US legislation.

The law of 21 March 2021 introduced the procedure of ‘preparatory settlement’ (“Voorbereidend akkoord” – art. XX.39/1 of the Belgian Code of Economic Law). The procedure (*) has the same focus as the court-supervised reorganization: finding a settlement with creditors, enabling companies to survive. However, it differs from the court-supervised settlement and comes with certain “flaws” for creditors.

Therefore, and despite the legislator’s good intentions, we still advise creditors to start early with a protective or executive seizure (or even a court-supervised reorganisation) rather than facing the risks of a preparatory settlement, when payment is at risk. Below, you can read why.

Court-supervised reorganization vs. preparatory settlement

The preparatory settlement is different from the court-supervised reorganization in that:

  • It opens ‘in silence’, on initiative of the debtor, and has an informal character. Not so for court-supervised reorganization, which is public: the opening is announced in the Belgian Official Gazette (Belgisch Staatsblad).
  • It is managed by a court mandatory (“gerechtsmandataris”), where the court-supervised reorganization is led by the debtor in most cases.
  • It does not imply a formal protection from the debtor against the creditors, where under the court-supervised reorganization it is not possible for the creditors to seize the assets of the debtor or to seek payment through other means.

What about creditors in this new procedure? They are confronted with new challenges, leaving them with few remedies at hand.

Knowledge of other creditors

There is no guarantee that all creditors are actually contacted and involved in this procedure.

Moreover, the uninvolved creditors shall have no access to the official list of all existing creditors, with no indication of the full amount of considered debts at stake.

Creditors will therefore not know their position compared to other creditors. This will make creditors more reluctant to accept any informal settlement as part of a ‘preparatory settlement’.

Individual protective measures

Within the frame of this procedure, protective measures against individual creditors may be granted. They can last up to four months at most. The granting of such a measure can be questioned before the Court of Appeal. This appeal can easily take one year or more.

Comprehensive reorganisation plan

The informal negotiations might lead to most creditors accepting a comprehensive reorganisation plan (‘een reorganisatieplan’), which involves all creditors. The court mandatory shall then apply for a court-supervised settlement procedure.

That is: the comprehensive reorganisation plan shall be formalized by the court.

However, such a comprehensive reorganization plan always places ‘minor’ creditors in a weak position. The plan is accepted by the majority of the creditors that altogether hold, at least, half of the total debt.

Once the plan is formalized by the court, he can file an appeal at the Court of Appeal, within fifteen days of the court’s formalization. Note that the period for appeal is very short. This appeal is dealt with urgently.

Creditors: be on your guard

As the legal maxim goes: the law is at the side of those who are alert: Ius vigilantibus…

The same applies here. When the payment of claims is at stake, creditors better start on time (with a protective or executive seizure or even a court-supervised reorganisation) before they are forced to accept court-supervised protection measures or an imposed reorganization plan.

Feel free to contact Van Gompel Advocaten for any question on how to protect your monetary claims and when to act against (a threat of) an insolvent debtor.

(*) The law is in force until 16 July 2022 while meanwhile its relevance will be evaluated.

Laura Van Gompel – August 31st 2021 – At the beginning of August 2021, some modifications to the Civil Code for the Federal District (“Code”) were published in the Official Gazette of Mexico City.

These modifications mainly aimed at including and recognizing the use of electronic means for certain aspects of family, contract and company law. Below, some examples of the Code’s reforms.

  1. Consent

Article 1811 of the Code now recognizes the binding force and validity of offers and acceptances thereof made by any kind of electronic, optical or technological means. That is, consent can now be validly given by electronic, optical or technological means, without the need of any previous written arrangement allowing these means.

  1. Written form

According to the Code, certain contracts need to be agreed upon in writing. For these contracts, article 1834 of the Code now defines that they can be signed 1) by handwritten autograph, or 2) with the use of the so called “Firma Electrónica Avanzada” (or “FIEL” which is obtained by authorization of the Secretary of Tax Administration) or the “Firma Electrónica de la Ciudad de México” (or “Llave CDMX” which is obtained by authorization of the Federal District Government). The FIEL and Llave CDMX were initially conceived for the filing and signing of governmental procedures or request, such as tax declaration, civil registry applications, etc. As from August, both the FIEL and the Llave CDMX are recognized to validly sign contracts that, by law, need to be agreed upon in writing.

  1. General assemblies

At last, modified articles 2675, 2677 and 2713 of the Code define that general assemblies of shareholders may now be held by means of videoconference, that allow real time communication. The condition is that the foregoing convocation to the assembly indicates the use of the conference call for the meeting, the exact channel (teams, webex, etc.) or number to dial and, if applicable, the password for access. Additionally, the board of directors has the obligation to record and store the digital reunion. The article also provides for the meeting to be held “in writing”. In this case, the minutes should be signed by the chairman or secretary, by autograph or FIEL (it is not specified whether the Llave CDMX – see higher – is also allowed).

Is it possible that the obstacles involved with the social distancing, quarantining and travel restrictions were the (final?) impulse for the (local) Mexican legislator to give the Code this very much needed update?

Laura Van Gompel – August 31st 2021 – A foreign company that wishes to start business in Mexico can do so by opening a branch or signing a partnership/joint venture with a local company. However, the foreign investor can also decide to constitute a new company in Mexico, i.e. a legal entity pursuant to Mexican law. This entails several challenges and certain knowledge of the Mexican system and practice.

Here you can find some breve guidelines on the matter. For more detailed information, our local council shall gladly assist you.

  1. Grant a power of attorney (POA): in favor of your legal representative. This will allow him or her to take all necessary steps, in your name and on your behalf, in order to open and register an operational company.
  1. Get the Ministry of Foreign Affairs’ authorization: for your company’s name.
  1. Create the incorporation deed: before a public notary which contains, the constitutive act and the company’s articles of association (with the necessary rules on board members, powers of attorney, general meetings, etc.).
  1. Obtain the company’s RFC (tax ID number): at the Secretary of Tax Administration and open a bank account.
  1. Register before local authorities: such as the Public Registry of Property and Commerce and the Mexican Institute for Social Security.

Laura Van Gompel – August 31st 2021 – The GDPR most certainly also had an impact outside the EU, for example in Mexico.

As a result of the GDPR, modified compliance and data protection programs worldwide, many Mexican companies had to adapt to new processes or practices imposed by their European business partners or parent companies.

However, Mexican companies also undergo a direct influence of the GDPR. First of all, the GDPR becomes applicable for Mexican companies that offer services or goods to data subjects located in the EEA.

Whether the Mexican company in question acts as a controller or processor is irrelevant, as well as the location of the processing activity. Also the fact whether the transaction was free or upon payment does not matter.

The mere condition that the processing concerns personal data of a EEA located data subject, due to goods or services being offered within the EEA, makes the provider/data processor accountable under the GDPR.

In second instance, shall the GDPR be an important regulator when Mexican companies receive, as result of a data transfer, access to personal data protected by the GDPR. For instance: when a European controller transfers personal data to a Mexican processor. In this case not only shall a written data processing agreement pursuant to article 28 GDPR be required, but also a sufficient transfer tool within the meaning of articles 46 ff. GDPR.

An article 28-data processing agreement a such, should not be problematic. As parties can “mould” the agreement in accordance to their data processing frame, their arrangements and respective liabilities, including of course all elements set out in article 28.

To give compliance to article 46 ff. GDPR, however, shall not be that self-evident. As Mexico has not received an adequacy decision in its favour, the most obvious tool shall be the Standard Contractual Clauses, as issued by the European Commission (see latest version of June 2021). Please not that also the official SCC’s are not necessarily enough to give “sufficient warranty” within the meaning of Chapter V GDPR. According to the EDPB recommendations of June 2021, for some outside EEA transfers, in addition to the SCC’s, supplementary measures shall need to be taken. This to guarantee “an essentially equivalent level of protection that meets the EU standards on fundamental rights, necessity and proportionality”.

The EDPB states that “Standard contractual clauses and other transfer tools mentioned under Article 46 GDPR do not operate in a vacuum.” The exporting party should verify, on a case-by-case basis and, where appropriate, in collaboration with the importer in the third country, if the law or practice of the third country impinges on the effectiveness of the appropriate safeguards contained in the Article 46 GDPR transfer tools.

According to the EDPB, this assessment by the exporter must contain elements:

– on whether public authorities of the third country of your importer may seek to access the data with or without the data importer’s knowledge, in light of legislation, practice and reported precedents;

– on whether public authorities of the third country of your importer may be able to access the data through the data importer or through the telecommunication providers or communication channels in light of legislation, legal powers, technical, financial, and human resources at their disposal and of reported precedents

The Mexican “situation” has not been subject of any European case law. However, bearing in mind Schrems II and the abovementioned EDPB guidelines, it seems appropriate to combine the article 46 SCC’s with supplementary measures, for data transfers to Mexican importers. Certain local laws do indeed regulate and allow (communication) surveillance by public authorities (Código Nacional de Procedimientos Penales, Ley de la Policía Federal, Ley de Seguridad Nacional, Ley Federal de Telecomunicaciones y Radiodifusión, Ley Federal Contra de Delincuencia Organizada, Ley General para Prevenir y Sancionar los Delitos en Materia de Secuestro, etc.).

Lieze Czech – July 29th, 2021 – Belgian law provides for a tax friendly treatment of copyright income, provided certain conditions are met. Do you create literary and artistic works, and do you transfer or license your copyrights in exchange for a renumeration? Then you might benefit from this favorable tax regime.

This article explains what copyrights are, how this favorable tax regime works, which situations it covers and why getting an advance tax ruling with the Belgian tax authorities is advisable.

What is protected by copyright?

A copyright protects literary and artistic works in a very broad sense and can subsist in any work in which the basic legal conditions (i.e. tangible form and originality) are united.

This includes all kind of creations, such as literary, musical and dramatic works but also choreographic works, architectural works, software, web-design and layout, material design, photographs, audiovisual works, etc.

Hereby, the work is actually protected in an automatic way and without any formality. As an author, you don’t need to take any additional measures to benefit from the copyright protection of your work. Copyright is granted automatically as soon as the conditions of protection are fulfilled.

Which sector can be covered by this regime?

This tax friendly copyright regime is set out in Article 17, §1, 5° of the Belgian Income Tax Code 1992 and is relevant for employees, freelancers, and business owners.

In practice, following sectors can easily benefit from this special tax regime: authors, artists, dancers, journalists, architects, musicians, designers, photographers, software developers, actors, marketeers etc.

What are the requirements for this regime?

This copyright tax regime only applies if (1) there is a transfer or license of copyrights and (2) the author receives monetary compensation in return. According to Article 17, §1, 5° of the BITC 1992, this income is taxable as “moveable income”.

In this respect, we recommend our clients to describe the transfer or license of copyrights in a written contract, together with the copyright royalties that will be paid.

What is the relevant tax rate for copyright royalties?

This means that in Belgium the tax rate for copyright payouts is only 15%, instead of the regular progressive tax rate of up to 50%. This tax rate can drop even further to 7,5% for the lowest scale because of lump sum expense deductions.

For income year 2021, the maximum amount for distributions in royalties is €62.550. This amount is subdivided into different levels with separate deductible fixed costs.

Below you will find a schematic overview of the fiscal thresholds for copyright renumerations for the income year 2021:

Copyright royalties Expense deductions Taxable Tax rate
€0 -€ 16.680 50% € 8.340 7,5%
€16.680 – €33.360 25 % € 12.510 11.25 %
€33.360 – €62.550 0% € 29.190 15%
> €62.550 Taxed as such under the usual progressive rates (between 25% and 50%)


Once above the amount of € 62.550, the income will be regarded as “professional income” and will be taxed as such under the usual progressive rates.

The tax due must be withheld at source and paid directly to the Belgian tax authorities within 15 days of the payment.

A realistic valuation of copyright royalties…

The Belgian tax authorities generally do not accept that your entire income consists of a copyright income. That said, the renumeration for the transfer or license of copyrights must be realistic. This valuation often depends on several factors such as the type of work and is demonstrated by previous rulings of the Belgian Ruling Commission.

How can companies make use of this favorable regime?

  • Draw up a copyright agreement

In order to make use of this favorable tax regime, there must be an effective transfer or license from one party to another. Hereby it is important to provide a clear distinction between the “normal” salary of the person concerned and the remuneration for this transfer or licensing.

  • Request a prior ruling from the Belgian tax authorities

Even though a company can decide for itself whether or not to make use of this tax regime. We recommend nevertheless to request a prior ruling from the tax authorities. This is in particular because the tax authorities adopt a strict approach and impose additional requirements in practice. This is certainly the case when it comes to the valuation of copyright royalties.

By getting a ruling from the tax authorities, your company obtains legal certainty and is sure during a period of 5 years that the Belgian tax authorities won’t come back to levy additional taxes .

What can we do for you?

Our team can assist your company with the application of the favourable tax regime income resulting from the transfer or licensing of copyrights under the employment or cooperation agreement.

This includes giving general advice, drawing up a copyright agreement or adapting the existing agreements where necessary and filing a request for an advance tax ruling with the Belgian Office for Advance Tax Rulings.