1.5 Regulatory environment

1.5.1 Income tax and payroll tax rules Overview

Employee benefits are exempted from income tax and/or payroll taxes as part of government strategies to encourage their use as an instrument of social policy. To ensure the effectiveness of this incentive system, strict rules govern the allocation and use of these solutions, particularly regarding the employer’s contribution and role, the eligible beneficiaries and how the benefits may be used.

In some countries, companies have to be licensed to operate in the Employee Benefits market. They may also be subject to legal and regulatory requirements governing the issue of digital tickets or investment of the float (corresponding to the cash received from clients for prepaid services that has not yet been reimbursed to partner merchants). This is the case in France and Romania, for example (see section 2.1.4, page 40 and Note 4.7 to the consolidated financial statements, page 241).

The Fleet & Mobility Solutions business line is not affected by the existence of these kinds of exemptions.

The regulatory environment is illustrated in the following sub-sections by a description of the legislation applicable to meal vouchers in France and Brazil. Regime applicable in France

Rules governing the allocation and use of meal vouchers

The allocation of meal vouchers by an employer is governed by a set of rules that include the following:

  • the vouchers may only be allocated to company employees (including interns, in accordance with Article L.124-13 of the French Education Code [Code de l’éducation]);
  • all employees of the company must be allocated vouchers with the same face value. However, an employer can choose to allocate meal vouchers only to selected employees, provided that the selection criteria are non-discriminatory;
  • employees can only receive one voucher per meal eaten within their daily working hours (part-time employees therefore receive a meal voucher when their working hours include time set aside for a meal).

The use of meal vouchers by employees is also governed by a set of rules that include the following:

  • employee users may use the vouchers to pay for their restaurant meal or the purchase of a ready-meal, dairy products or fruit and vegetables up to a daily limit of €19. Partner merchants are not allowed to give any money back on paper voucher payments, while paperless vouchers allow employees to pay merchants the exact amount of the transaction. Government order no. 2020-706 of June 10, 2020 authorized a temporary increase in the daily limit on meal vouchers used exclusively in restaurants, cafés and bars to €38. The authorization was initially planned to remain in effect until December 31, 2020, but was extended to August 31, 2021 by government order no. 2021-104 of February 2, 2021;
  • meal vouchers cannot be used on Sundays or public holidays, unless an exception is made by the employer exclusively for employees working on those days. For paper vouchers, this decision is to be explicitly stated on the voucher itself. For paperless solutions, the employer is to inform the employees concerned of the decision by any means before issuing the benefit. The abovementioned government order no. 2020-706 of June 10 temporarily authorized the use of meal vouchers on Sundays and public holidays exclusively in restaurants, cafés and bars. The authorization was initially planned to remain in effect until December 31, 2020 but was extended to August 31, 2021 by government order no. 2021-104 of February 2, 2021.

The public authorities also used the abovementioned government order no. 2021-104 to extend the validity of 2020 meal vouchers until August 31, 2021. Aside from persons and organizations working as restaurant owners or greengrocers, the only merchants that can accept meal vouchers are those accredited by France’s Commission Nationale des Titres Restaurant (CNTR).

Employer and employee benefits

Meal vouchers are financed jointly by the employer (or in some cases the social and economic council) and the employee. The employer’s contribution (plus – for the calculation of the ceilings below – any contribution by the social and economic council) cannot represent less than 50% or more than 60% of the vouchers’ face value. The employer’s contribution is exempt from employee and employer social security contributions provided that it does not exceed a certain ceiling, which is adjusted each year in line with the consumer price index (excluding tobacco) during the 12 months to October 1 of the year preceding the year the meal vouchers are acquired, rounded, if applicable, to the nearest cent (Article 81, 19° of the French General Tax Code (Code général des impôts), amended by France’s 2020 Finance Act no. 2019-1479 of December 28, 2019). This exemption ceiling was maintained at €5.55 for 2021. The employer is free to contribute more than this amount, provided that the 50% and 60% minimum and maximum limits mentioned above are adhered to. In this case, only the fraction of the contribution in excess of the exemption ceiling is added back for the purpose of calculating the basis of assessment of social security contributions.