1.Direct taxes
Individuals and legal entities deriving business income, self-employment income, or agriculture and forestry income, which are encountering cash shortages due to Covid-19, can file a request for:
- A waiver of Q1 and Q2 2020 advance payments for both corporate income tax and municipal business tax. The tax authorities have clarified that advances for net wealth tax are non-eligible.
- A deferral for the payment of corporate income tax, municipal business tax and net wealth tax liabilities (but only if due after 29 February 2020) without any penalty for late payment.
Both requests need to be introduced through the filing of specific forms available on the Luxembourg tax authorities’ website and, when eligible, will be automatically approved.
Moreover, the deadline to file both personal and corporate tax returns has been extended to 30 June 2020. This extension also applies to taxpayers wishing to request, modify or revoke their status for individual taxation.
2.VAT
The Luxembourg indirect tax authorities announced that exceeding deadlines for the filing of VAT returns should not trigger any penalties. This tolerance applies until further notice by the administration.
3.Cross-border workers
Non-essential workers have been ordered to work from home in an effort to curb the spread, and, although commuters remain allowed under specific circumstances to work on-site, Belgian, French and German workers require a specific certificate to cross the border.
Acknowledging Covid-19 is a case of force majeure, both Belgian and French governments announced they reached an agreement with Luxembourg to relax 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, the days where Belgian and French tax residents work from home due to Covid-19 will not count towards the respective 24-day and 29-day threshold and relating income should remain taxed in Luxembourg. In both cases, such measure is retroactive as of 14 March 2020.
Although no communication has been made yet, it is assumed the government remains in talks with Germany where such a limit (19 days) is also in place.
4.Filing of annual accounts
The Luxembourg Business Registers announced that an additional period of 4 months will be granted to businesses in order to file their financial data with the Luxembourg trade and companies register. The costs of filing will also remain the same and any late filing penalties will be suspended until 30 November 2020 when the filing is made with a maximum delay of 4 months.
Businesses closing their financial year as at 31 December 2019, will therefore be allowed to file their annual accounts until 30 November 2020 for the usual cost of 19 EUR (excl. VAT).
5.Opening of administrations to the general public
Although specific appointments may remain possible, tax authorities are currently operating on a reduced service basis and strongly advise using email or phone to approach their services when required.
Their contact details can be found on their respective websites (direct / indirect tax authorities).
The Luxembourg Business Registers also announced a closing of their assistance desks until 31 March 2020. Currently, email remains the only means to reach their services in case of urgency.
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For any further questions or assistance, please do not hesitate to contact your trusted Tiberghien advisor.
Maxime Grosjean - Senior Associate (maxime.grosjean@tiberghien.com)
Sylvie Eiras - Senior Associate (sylvie.eiras@tiberghien.com)
Emma Fontenaud - Associate (emma.fontenaud@tiberghien.com)