Whenever you request guidance on how to invest to reach FIRE, you will often receive the comment you should invest in Emerging Markets e.g. through IWDA + EMIM. But should you?
Last Updated on August 27, 2019 by Mr. FightToFIRE
Meal, sport- and culture, eco, gift and training vouchers are the types of vouchers or “cheques” you can receive as a belgian employee. It’s the Belgian government’s way of lightening the tax load on employers and employees alike. These vouchers are considered benefits of all kinds for the employees who receive them. They are therefore deductible as a professional expense at the employer. As en employee are excempt from paying taxes and social contibutions on the amount you receive.
The three musketeers
There are a plethora of options an employer can choose from so lighten their tax burden but to also lighten the tax burden of its employees. There are three ‘main’ vouchers:
- Sports & culture
A decent portion of the Belgian working force receives one or more of these vouchers and some even receive additional gift vouchers.
The most popular one is the meal voucher. Roughly 50% of Belgian employees get them. Originally intended for employees of companies without a company canteen, they have grown into a staple of an employees salary package. A solid third (34.13%) of employees receive this benefit (Acerta, 2018).
Since a few years, they are received on a dedicated chip card and can thus not be exchanged for cash after receiving them. The vouchers are also distributed and managed by three dedicated companies.
On occasion, you will read in or hear on the news that the (next) government wishes to abolish these meal vouchers because it’s a roundabout way to combat the root cause, extremely high tax pressure. Like always this does down after a while, especially when (government) studies show that ~380 million in domestic consumption and 10,000 jobs could be lost and that the government revenues would fall by ~500 million EUR.
The second most popular voucher is the eco one. 26,76% of Belgian employees get them. Eco vouchers are clearly less popular and are also newer than their food counteparts. In wake of the credit crisis the government wanted to grant employees a net purchasing power increase. From 2009, companies were allowed to grant their employees up to € 125 in eco vouchers per year. From 2010, that amount was increased to € 250 per employee per year.
Just like with the meal vouchers the plan to abolish these vouchers but just like with the meal vouchers it ends a silent death.
Sports and culture vouchers
Sports and culture vouchers are the Third and least used kind. These vouchers were actually introduced a bit earlier, in 2006 to be exact, than the eco vouchers. Just like the other vouchers, this one is also limited in amount. At the moment of writing the limitation is set at 100 EUR. On top of that, there are a couple of other limitations:
- The period of validity must be specified and may not exceed 15 months: from 1 July to 30 September of the following year;
- It can only be exchanged with cultural providers that are recognized by or receive an allowance from the government or with sports associations for which there is a union that is recognized by or receives an allowance or belonging to the national football, hockey, boxing and golf federations;
- You can’t exchange it for cash.
- The vouchers are on name only and this info must be visible on the vouchers.
- It’s a benefit stipulated in the collective agreement concluded within the joint committee, a collective agreement concluded at company level or a written individual or collective agreement;
In addition to the aforementioned vouchers, the employer can also give his employees a more personal gift. This is possible in the form of a gift voucher. Although gift vouchers should, in principle, be considered as normal pay and thus get taxed like it, the employer can still grant them in certain cases without having to pay social security contributions and taxes.
for these checks to be issued as an advantageous reward, a number of conditions must be met.
The award must be made on the occasion of Christmas, New Year or Saint Nicolas. Distribution at another time is therefore not eligible. Next to that, the amount cannot be greater than 35 EUR per year per person. There are a few other requirements but due to these stringent limitations it’s hardly used.
We'll figure something out
As you can read, even though our taxes are one of, if not the highest in the world, our Belgian government will find a way to lower the burden. Unfortunately because it’s such a roundabout way, it’s not always clear that our actual tax burden is at least a little bit less than what is visible at first glance.
While it certainly helps, the truth remains that it’s a very indirect and cost inefficient way of doing this. Easier would be to clean up the tax regulations but as the studie (Acerta, 2018) shows, there is very little incentive for the government to abbolish them. But who knows though. Things can change with a new government that is (hopefully) in the works.
- Acerta, 9 August 2018. De voordelen van maaltijd- en ecocheques. Retrieved from http://www.consult.acerta.be/nl/blog/de-voordelen-van-maaltijd-en-ecocheques
- ACLVB, Retrieved from https://www.aclvb.be/nl/ecocheques