New Supreme Court ruling on equity incentives

Belgian social security treatment of incentives granted by foreign group companies – the ping-pong rally continues

The Belgian Supreme Court has issued a new judgment in the long-running debate on whether equity compensation granted by a foreign group company to employees of its Belgian subsidiary is subject to Belgian social security contributions.

Although the case concerned Restricted Stock Units (RSUs) granted by a parent company, the underlying principle is broader and would apply to any benefit granted by a third party to employees who are subject to the Belgian social security scheme. In practice, the judgment is particularly relevant for international long-term incentive plans which are often designed and administered at group level.

The Supreme Court did not fundamentally change its earlier position, but rather clarified when a benefit is to be considered as consideration for work performed under the employment contract. If that is the case, the benefit qualifies as remuneration for Belgian social security purposes, irrespective of the fact that it is granted and funded by a foreign group company.
 

Legal framework

Under Belgian social security rules, a benefit granted to an employee is subject to Belgian social security contributions if four conditions are cumulatively met:

• the benefit can be valued in monetary terms;
• the employee is entitled to the benefit;
• the benefit is granted in the framework of the employment relationship; and
• the benefit is at the charge of the employer.

These cumulative conditions are commonly referred to as the social security concept of remuneration. The most contested condition, whether the benefit is at the charge of the employer, is generally considered to be met if the employer ultimately bears the cost of the benefit (financial burden) or has undertaken a legal commitment to grant the benefit (legal burden).

Over time, the Belgian Supreme Court has clarified that it considers the social security concept of remuneration to broaden the labour law concept of remuneration, which is defined as the consideration for work performed in the execution of the employment contract. The labour law concept of remuneration is therefore encompassed by the social security concept of remuneration. In simplified terms, if there is a sufficient link between the employee’s work for the employer and the benefit, the benefit is subject to social security contributions, even if it is granted by and financially borne by a third party.
 

Memory refresh of the case history

The case has a long procedural history – the initial social security inspections date back even further to 2013 and 2014 – and has already resulted in several judgments with different outcomes.

Labour Court of Appeal of Ghent - 20 April 2020

The Court ruled in favour of the Belgian social security authorities by focusing on the social security remuneration concept. It considered, in essence, that the RSUs were at the charge of the Belgian employer because the Belgian employer made the legal commitment to grant the benefit.
 

Belgian Supreme Court - 5 September 2022

The Belgian employer successfully challenged the Ghent judgment. The Supreme Court held that the Labour Court had not established whether the RSUs were consideration for work performed and had not sufficiently justified why they were at the charge of the Belgian employer. It clarified that, where a benefit is not established to meet the labour law remuneration concept, it falls within the broader social security remuneration concept only where it is at the charge of the employer, notably through a legal commitment by the employer to grant it.
 

Labour Court of Appeal of Antwerp - 20 November 2023

Following referral, the Labour Court of Appeal of Antwerp ruled in favour of the Belgian employer. It focused on both the social security and labour law remuneration concept and held that the RSUs were not subject to Belgian social security contributions. The court relied on several factual elements, including the parent company’s own ground for granting the RSUs, the absence of a legal commitment and financial cost for the Belgian employer, and the documentation of the plan directly between the parent company and the participating employees.
 

Belgian Supreme Court - 29 June 2026

The Belgian social security authorities successfully challenged the Antwerp judgment. The Supreme Court has now set aside this judgment based on the grounds detailed below and referred the case to the Labour Court of Appeal of Brussels.
 

The June 2026 judgment

The June 2026 judgment from the Supreme Court focuses on the scope of the labour law concept of remuneration.

As a general principle, the Supreme Court indicates that benefits granted to bind employees to the company, to encourage their continued commitment, or to ensure diligent performance are benefits granted as consideration for the work performed in execution of the employment contract and are therefore remuneration in the labour law sense.

More specifically, the Supreme Court rules that the Antwerp Labour Court of Appeal could not legally conclude that RSUs granted by a parent company in order to bind the employees to the company in the longer term, following a selection process whereby the Belgian employer suggested names to the parent company, accompanied by grounds and motives for their recommendation, did not constitute consideration for the work performed in execution of the employment contract.

Based on the above, the Supreme Court seems to significantly restrict the possibility of successfully relying on an exemption from Belgian social security contributions for incentives designed to retain, motivate or reward employees in connection with their professional commitment. 
 

What happens next?

Continuing its journey through the Dutch-language Labour Courts of Appeal, the Brussels Court will now need to review the case and assess the facts within the framework set by the Supreme Court.

The judgment of the Brussels Court will most likely be the swan song of the case. As the Supreme Court judgments in this case have now dealt with both the social security and the labour law concept of remuneration, any further cassation request would be highly exceptional.
 

What does it mean in practice?

Companies that have taken the position to exclude foreign-paid incentives from Belgian social security contributions should reassess whether that position remains defensible in light of the latest Supreme Court judgment.

This review should be comprehensive, going beyond the financial treatment of the cost, covering relevant elements such as the purpose of the plan, the wording of the plan rules and award documents, any link with continued employment or performance, the role of the Belgian employer in the selection or grant process, and any reference in employment documentation or HR communications.

Your EY Belgium HR Legal team is perfectly positioned to assist with the assessment of the potential impact on your incentive plans.

For clarity, this case law does not affect employees who are not subject to Belgian social security legislation based on international coordination rules, for example because they hold an A1 certificate or Certificate of Coverage.