Elimination of eco cheques... or maybe not....

A few months ago, the governing parties submitted a legislative proposal to replace eco cheques with a net allowance (the ‘eco allowance’) for which, like with the eco cheques, no payroll tax or social security contributions would have to be paid. The idea behind the proposal was to eliminate the eco cheques as quickly as possible.

But this proposal has been met with fierce opposition from the social partners (on both the employer and employee side), as well as the issuers of the eco cheques. The Council of State has also stated in its recommendations that an elimination of the eco cheques conflicts with the principle of equality.

A decision on the proposal has been delayed several times as a result.

This infoflash provides an overview of the current state of affairs.

A brief summary: what is an eco cheque?

Eco cheques were introduced in response to the Interprofessional Agreement for 2009-2010. It was then left up to the sectors to decide whether they wished to allocate eco cheques in their sector and to determine the modalities.

The eco cheque offers an advantage when purchasing eco-friendly products and services included in the no. 98 list enclosed with the Collective Labour Agreement (such as low-energy light bulbs, water-saving shower heads, eco-driving courses, compost bin, flower bulbs, topsoil, etc.).

The total amount of the eco cheque may not exceed 250 euros per reference period, with a maximum limit of 10 euros per cheque.

The validity of an eco cheque is limited to 24 months from the date on which it is made available to the employee.

For more information on eco cheques in your specific sector, see our sectoral documentation.

Government initiative

The legislative proposal on the replacement of the eco cheque with a net allowance provides for such a substitute. The initiators aim to eliminate the high costs associated with the eco cheques (for both the employer and retailer) and the loss of purchasing power by the employee if the eco cheques are not used.

Responses

Recommendations from the NAR

In its recommendations, the National Labour Council (NAR) refers to the fact that eco cheques are intended for the purchase of eco-friendly products and services. Replacing the eco cheques with a net amount without maintaining this requirement can lead to a loss of the legal basis. As a result, the net amount itself could be called into question, which means that the legislative proposal would offer no legal certainty.

In its advice, the NAR also mentioned a number of other elements:

• A generalisation of the principle of the net allowance, resulting in a loss of tax revenue for the government.
• A lack of legal certainty in the medium or long term: the government (current or future) can still decide to eliminate the net allowance, or impose taxes and/or social security contributions on it.

As an alternative, the Council suggests a complete switch to electronic eco cheques.

Recommendations from the Council of State

According to the Council of State, the legislative proposal violates the principle of equality. After all, the eco cheques are considered in principle to be taxable revenue or as wages subject to social security contributions, provided that strict requirements are fulfilled. Converting the eco cheques into an eco allowance that is paid directly to employees and can be used at their personal discretion eradicates the difference with wages, as a result of which this tax concession is no longer justifiable.

Exceptions to the principle of equality are always a possibility, of course, but must be sufficiently justifiable. This is not the case at this time. However, the Council of State does offer the initiators the possibility to provide such justification.

What’s next?

The government continues to pursue this proposal and a new vote is scheduled for after the Easter holiday. As always, we will keep you fully updated as the situation progresses.

Source: Legislative proposal regarding the replacement of the eco cheque with a net allowance; Recommendation no. 2.029 of the NAR; Recommendations from the Council of State no. 61.016/1 and 61.017/1 of 21 March 2017.