Warrants and options are an attractive form of remuneration because of their favourable tax and social security treatment.
Previously, the tax ruling commission declared that the ratio between an employee’s remuneration paid in warrants and options and paid in cash should not be disproportionate. However, the ruling commission did not define 'disproportionate'.
In two recent decisions, the ruling commission clarified that the real/economic value of the warrants and options granted to an employee should not exceed 20% of the total annual gross salary, which includes the employee’s monthly remuneration and holiday pay (0.92), the 13th month and variable remuneration.
The 20% rule only applies to warrants and options granted in 2018 for work performed in 2018. Warrants and options granted in 2018 but for work performed before 1 January 2018 are excluded from the 20% rule but must still be proportionate.
Note that tax rulings are only binding for the parties concerned. Nevertheless, they serve as useful precedents for other employers, and the conversion of 'disproportionate' into a percentage is especially helpful.
For 100% clarity on this, employers can always request a individual tax ruling.