Since the start of the Covid-19 crisis, teleworking has been largely used as a measure to curb the spread of the virus, becoming even a requirement for all workers able to do so.
COVID 19 being acknowledged as a case of force majeure, Luxembourg and the governments of the three bordering countries had reached an agreement to relax the double tax treaty measures that impose a limit on the amount of days cross-border workers can work outside Luxembourg before being taxed in their country of residence.
As a consequence, since March 2020, the days worked from home by Belgian, French and German tax residents due to Covid-19 are, subject to conditions, not counted towards the thresholds provided for by the treaties (respectively 24, 29 and 19 days). The relating employment income remains therefore in principle taxable in Luxembourg.
On June 15, 2021 the Government announced that the mutual agreement concluded with Belgium has been extended until the end of September 2021.
On June 17, 2021 the same announcement has been made regarding the mutual agreement concluded with France.
As concerns German cross-border workers, the mutual agreement concluded on October 7, 2020 provided for an automatic extension from month to month until withdrawal by one of the parties. In the absence of withdrawal, this agreement remains in force as well.
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Tiberghien’s international tax team will continue to monitor these and other tax developments relevant for Belgium / Luxembourg based multinational enterprises. Our editorial board consists of:
- Koen Morbée (International and EU corporate tax, firstname.lastname@example.org);
- Michiel Boeren (International and EU corporate tax, email@example.com);
- Katrien Bollen (HR tax and global mobility, firstname.lastname@example.org);
- Ben Plessers (Transfer Pricing and Valuations, email@example.com);
- Gert Vranckx (VAT, customs, excises and other indirect taxes, firstname.lastname@example.org);
- Rik Smet (International and EU corporate tax, email@example.com).
In case you have further questions on this publication or want to discuss a tax query, please do not hesitate to contact the author(s) or one of the members of the editorial board.
This newsflash is for information purposes only and cannot be relied upon as legal advice.