Facts

This  case  concerns  an  aspect  of  the  Belgian  “Limosa”  legislation that was introduced on 1 April 2007. Article 153 of the relevant Act of Parliament  (Programmawet)  requires  independent  service  providers coming  from  abroad  to  provide  services  in  Belgium,  with  certain exceptions, to notify the social security authorities before starting their service provision, on pain of a fine of up to € 2,500. The notification must include details about the identity of the service provider, the type of  work  to  be  performed  in  Belgium,  the  start  date,  the  anticipated duration  of  the  services,  the  place  where  those  services  are  to  be provided, value added tax details, identification details of the Belgian customer and the weekly hours of work. A notification is valid for a maximum period of 12 months.
In 2009, the European Commission informed the Belgian government that  it  viewed  the  “Limosa  notification”  requirement  as  being incompatible with the freedom to provide services guaranteed by Article 49  EC.  The  Belgian  government  took  the  opposite  view,  explaining that the Limosa rules were introduced to combat abuse by “fake self-employed persons” who circumvent the minimum standards regarding the  social  protection  of  employees.  Following  further  exchanges  of views,  the  Commission  instituted  the  present  infraction  proceedings pursuant to Article 238 TFEU. The Danish government was given leave to intervene in support of Belgium.

ECJ’s findings

1.  It is settled case-law that Article 156 TFEU requires the abolition of  discrimination  of  service  providers  established  in  another Member  State  on  the    basis  of  their  nationality  or  place  of business, as well as the abolition of every restriction prohibiting, hindering or making less attractive the provision of services by a  service  provider  that  is  established,  and  regularly  performs similar  services,  in  another  Member  State,  even  where  the restriction applies equally to domestic service providers (§ 37-38).
2.  The formalities that non-Belgian service providers are required to  fulfil  before  being  allowed  to  start  providing  services  in Belgium restrict their freedom to provide services. The issue is,  therefore, whether this restriction is justified, taking into account that cross-border service provision is a matter that has yet to be harmonised within the EU (§ 39-43).
3.  A provision such as that at issue can be justified if (i) it meets an urgent need in the general interest and that need has not been met  by  rules  applying  to  the  service  provider  in  its  country  of origin, (ii) it is suitable for that purpose and (iii) it does not go beyond what is necessary to achieve that aim (§ 44).
4.  The aim of combatting fraud, in particular fake self-employment and undocumented (“black”) work, relates not only to the aim of guaranteeing the financial equilibrium of the social security systems, but also to the aim of preventing unfair competition and social  dumping,  as  well  as  protecting  workers,  including  self-employed service providers. As the governments of Belgium and Denmark point out, non-Belgian service providers who provide services  temporarily  in  Belgium  are  in  a  situation  that  is  not comparable to service provides who are permanently established in  Belgium.  The  discrimination  identified  by  the  Commission is  therefore  attributable  to  objective  differences  between  both categories of service providers. The issue is therefore whether the provision at issue is suitable for achieving the stated aim and does not go beyond what is necessary for that purpose (§ 45-49).
5.  The  regulations  regarding  administrative  cooperation  between Member States do not provide Belgium with adequate means to combat social fraud (§ 50-52). 
6.  A general suspicion of fraud is not sufficient to justify a measure that undermines the TFEU’s objectives (§ 53).
7.  The  Limosa  notification  requirement  is  not  limited  to  cases where  there  is  reason  to  investigate  compliance  with  tax  or social obligations. Moreover, the Belgian government has failed to explain satisfactorily why it is necessary for the achievement of  its  general  interest  objective  for  foreign  self-employed service  providers  to  provide  such  detailed  information  and  in what  respects  that  requirement  does  not  go  beyond  what  is necessary to achieve that objective. Thus, the provision at issue is disproportionate (§ 54-56).

Ruling

By imposing a prior declaration requirement on self-employed service providers established in Member States other than Belgium in respect of their activity in Belgium, Belgium has failed to fulfil its obligations under Article 56 TFEU.