A number of employees, sole traders and company managers receive part of their remuneration in the form of an electricity or heating allowance. This benefit is taxed at a fixed rate. If energy prices rise, companies and employers pay more to grant the benefit. Since beneficiaries always pay the same amount in tax, they suddenly get more value for their tax money.

The provision of electricity free of charge 

is by no means the only benefit in kind. Other benefits include company cars, mobile phones, PCs, tablets and internet subscriptions. They can also encompass free accommodation and even a gardener, a driver or domestic servants. The Tax Ruling Committee has even mentioned nannies. Yet, the De Croo government must have been extremely bothered by the provision of electricity free of charge. As soon as the energy crisis hit, it swept in with really unusual speed to abolish the fixed tax amount on the free provision of electricity. Since January 1st, 2022, beneficiaries of the allowance have been taxed on their actual electricity consumption, at least insofar as the benefit is not granted together with the benefit of free housing. For the latter category, the benefit remains taxed at a fixed rate.

In its own words, the government is thus getting a head start on the comprehensive tax reform that is being prepared. This government wants to get rid of benefits in kind. No more alternative forms of remuneration, wages should only be paid in euros. Cafeteria plans, the system allowing employees to have a say in selecting benefits in kind, are in the new tax reform's crosshairs. However, the reform is far from complete. Not to mention the fact that the perk of free electricity or heating isn't nearly the only benefit in those cafeteria plans. Why then tackle one benefit so harshly and unilaterally? Another tough question is why the electricity or heating allowance is not abolished if it is granted together with free housing. I wonder what the Council of State thinks about all that.

The Council of State must be consulted in order to verify the quality of the legislative work, in this case a royal decree. Finding the relevant advisory opinion took a while as it had not been published in the usual way. And that doesn’t seem fortuitous. The Council of State has concluded that the selective abolition of the benefit of free electricity and heating is a violation of the constitutional principle of equality. The Council of State does not see how making the distinction in taxation relating to the benefit in kind together or without free housing can reasonably be justified. Yet, this opinion has been swept under the rug. While 'The truth hurts' is not a legal adage, it may be appropriate here.

This government wants to get rid of benefits in kind. No more alternative forms of remuneration, wages should only be paid in euros.

It is written in the stars that the legality of the Royal Decree will be challenged on the basis of its inconsistency with the constitution. However, the government should have known better. Under the Michel government, the tax authorities have already been challenged by the discriminatory nature of the benefit in kind with regard to the right to housing. This has led to an amendment to the Royal Decree. History repeats itself.

Another conclusion is that cafeteria plans are under a lot of pressure. The employees who enjoy them and the employers who offer those benefits should also have known better.