As mentioned in our article from March 2018, the tax ruling commission clarified that, to benefit from a favourable tax treatment, the ratio between an employee's remuneration paid in warrants and his gross annual salary should not be disproportionate, and therefore not exceed 20%.

According to article 19, §2, 18° of the Royal Decree of 28 November 1969, the benefits deriving from options and warrants are exempted from social security contributions because they are not considered as 'salary'.

In practice, however, the National Social Security Office (NSSO) has limited the scope of this provision by adopting the tax authorities’ position.

If the benefits deriving from options and warrants are taxed as such (and thus recognized) by the tax authorities, they are excluded from social security contributions.

But if the tax authorities consider the benefits deriving from options and warrants to be disproportionate, social security contributions must be paid.

We learned that social security contributions will then be due on the whole benefit, not just on the part that exceeds the 20% limit.