The Ministry of Culture recently introduced the cultural voucher, an employee benefit that seeks to stimulate worker interest in cultural endeavours. Employers are not obliged to provide the benefit (which amounts to R50 each month), but those that wish to do so must sign up for the ministry's Workers' Cultural Programme.

The benefit was introduced in December 2012 through Federal Law 12.761 and is regulated by Decree 8.084 (issued on August 26 2013). The system operates within the ministry programme and procedures are governed by a normative instruction dated September 4 2013 issued by the ministry.

An employer may grant the benefit to an employee only if it joins the ministry programme. An employee may receive the benefit only after expressly indicating a wish to do so (this indication may be withdrawn by the employee at any time). The employee must partially fund the benefit, in the form of a payroll discount.

Companies must first offer the benefit to employees who earn less than five times the minimum wage. Such employees must contribute between 2% and 10% of the R50 benefit, depending on their level of salary. The benefit can also be provided to those who earn more than five times the minimum wage, provided that the employer has guaranteed that it will first grant the benefit to all employees who earn below this threshold. The required employee contribution will be greater for those earning about the threshold, varying from 20% to 90%, according to their salary levels.

Companies that register with the programme and pay tax on a real earnings basis will receive a tax incentive from the government. They may deduct the cost of the voucher from the income tax payable, up to 1% of the total amount due.

Since October 7 2013 employers who wish to offer this benefit to their employees have been able to register to do so on the ministry website. When registering, the employer must indicate the operator which it has chosen to supply the magnetic card that carries the voucher. This operator must be duly registered with and approved by the ministry.

The operators must produce and distribute the magnetic cards that carry the voucher and authorise commercial establishments to accept it. The operator can charge these commercial establishments an administration fee, varying from 0% to 6%. Neither the operator nor the employer can pay the benefit in cash.

The law provides that the benefit is not part of the employee's salary; thus, employers that grant it need not pay social charges (ie, social security and severance fund). The benefit will likewise not be part of the taxable income of those employees who receive it.

However, employers that wish to grant the benefit must comply strictly with all requirements of the law. The law expressly states that if all requirements are not met, the benefit granted will be deemed to be salary and will be subject to the corresponding social charges, in addition to fines and other penalties.

Employers that wish to join the programme must therefore fully understand and comply with all provisions of the law in order to avoid undesirable tax and employment liabilities.

For further information of this topic please contact Vilma Toshie Kutomi at Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados by telephone (+55 11 3147 7600), fax (+55 11 3147 7770) or email ([email protected]).