Enlighten your future Meal vouchers: Everything you need to know about the taxation and digitalization of meal vouchers
Meal vouchers: Everything you need to know about the taxation and digitalization of meal vouchers
On January 31, 2025, the Luxembourg Tax Administration published a new circular (n°115/7) concerning the taxation of meal vouchers, thus replacing the circular issued in 1993. This revision brings about a significant changes, in particular increasing tax exemption and introducing new formats in which the meal vouchers may be accepted. Here is an update on the key takeaways and important new measures to be considered .
1. Definition of meal vouchers
Meal vouchers are employee social benefits provided by employers to cover all or part of food expenses during working hours. The main rules to remember are:
• Only a personal use: Meal vouchers can only be used to purchase meals or foodstuffs.
• Daily limit: An employee can use up to 5 meal vouchers per day.
• Non-transferability: Meal vouchers cannot be sold or transferred, they are reserved for the exclusive use of the employee.
• Validity period: Meal vouchers are valid for a period of 12 months.
2. Important changes
The circular of January 31, 2025 brings about major changes concerning the taxation of meal vouchers:
• Increased tax exemption: The tax exemption ceiling for meal vouchers is now set at €12.20 per check, compared to €8 previously. This increase, provided in the grand-ducal regulation of September 25, 2023, makes it now possible to better take into account any increase in prices of meals and foodstuffs. However, it is important to note that, even if a meal voucher exceeds €15, the exemption will remain capped at €12.20.
• Mandatory digital meal vouchers: As from fiscal year 2024, only digital meal vouchers will be accepted, to simplify their management and improve their traceability. Businesses will have to abandon paper checks.
3. The advantages of digitalization:
The digitalization of meal vouchers brings numerous benefits for all parties involved.
• For employees, losing a meal voucher is no longer a problem. Thanks to digitalization, the balance can be checked in real time via their service provider's application. If the card is lost, the balance will be automatically transferred to a new card, in the same way as it is done with a bank card. In addition, they will be able to pay for their purchases using all the available balance to the nearest cent, within the limit of the authorized daily use.
• For businesses, this significantly reduces the administrative burden on HR and Payroll teams. The distribution of paper checks is now a thing of the past, with everything managed via the service provider's platform.
• Finally, for restaurateurs and merchants, this means an acceleration of cash collections (remittance) . They will no longer need to send physical tickets to be reimbursed. Security will be strengthened: digitalization will eliminate the risks of fraud and vouchers theft, and the meal voucher verification procedure will be automated.
This digitalization benefits everyone by making processes faster, more secure and easier to manage for employees, businesses and merchants.
4. Do you still have paper meal vouchers ?
If you still have paper vouchers, don't panic! You can continue to use them, within the limit of their validity date.
5. A real advantage for attracting new talents.
Attracting new talent can be a challenge, and the value of meal vouchers provides a real competitive advantage. With the new tax exemption ceiling set at €12.20, companies now have a greater flexibility to define the amount of each meal voucher, thus strengthening their attractiveness to candidates.
The revision of meal vouchers procedure as introduced by the circular of January 31, 2025 modernizes their management and makes them more advantageous, with an increased tax exemption and the obligation to go digital. These measures simplify the procedure for companies and secure the system.
For more details on these new measures, you can find the full text of the circular by following this link.
https://impotsdirects.public.lu/dam-assets/fr/legislation/circulaires/lir-115-7-du-3112025.pdf
