Germany, France and Belgium COVID-19 cross-border personal tax measures: further 2022 extensions confirmed

Personal income tax

Since the beginning of the COVID-19 crisis in March 2020, many Luxembourg non-resident cross-border employees have worked from their homes in Belgium, Germany or France due to the sanitary measures that were imposed.

To mitigate the risk that these employees are taxed in their home state during this exceptional situation, amicable tax agreements were concluded between Luxembourg and Belgium, Germany and France. Please refer to our previous tax and social security alerts for further information.

The Luxembourg tax authorities have now confirmed the extension of these amicable tax agreements, as follows:

• Belgium: on 10 December 2021, the amicable tax agreement of 19 May 2020 was extended by the Luxembourgish and Belgian competent authorities. In the absence of any objection from both Luxembourg and Belgium within the 2 weeks preceding 31 March 2022, the amicable tax agreement will be automatically extended until 30 June 2022.
• Germany: on 22 March 2022, Luxembourgish and German competent authorities decided that the mutual agreement concluded between Germany and Luxembourg on 7 October 2020 will continue until 30 June 2022. The agreement will be cancelled on 30 June 2022, and it will no longer be automatically extended beyond that date.
• France: on 15 December 2021, the Luxembourgish and French competent authorities concluded a new amicable tax agreement. In the absence of any objection from both Luxembourg and France within 1 week preceding 31 March 2022, the amicable tax agreement will be automatically extended until 30 June 2022.

As such, the above-mentioned non-resident cross-border employees working from home as a direct result of sanitary measures imposed due to the COVID-19 crisis will continue to remain taxable in the Member State where they would have normally worked (i.e., Luxembourg).

Social security

Subsequently, the social security measures concluded between Luxembourg and Belgium, Germany and France, which previously applied until the end of December 2021, have been extended until 30 June 2022.

This is good news for Luxembourg-based employers and Luxembourg cross-border workers living in Belgium, Germany and France.