Germany, France and Belgium cross-border personal tax measures during the COVID-19 crisis

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

26 August 2020

Luxembourg Tax Alert

Since the start of the COVID-19 crisis in March 2020, many Luxembourg nonresident cross-border employees have worked from their homes in Belgium, Germany or France.

To mitigate the risk that these employees are taxed in their home state during this exceptional COVID-19 situation, amicable tax agreements were temporarily made between Luxembourg and Belgium, Germany and France. Please refer to our previous tax and social security alerts in this respect.

The Luxembourg tax authorities have now confirmed that these amicable tax agreements have been extended as follows:

  • Belgium: on 24 August 2020, the competent authorities of Belgium and Luxembourg extended the amicable tax agreement of 19 May 2020, which shall subsequently apply from 11 March 2020 to 31 December 2020.
  • Germany: in the absence of any objection from both Luxembourg and Germany, the amicable tax agreement of 3 April 2020 will automatically be extended for another month; i.e., until the end of September 2020. This monthly automatic extension will continue until both parties officially renounce the agreement.
  • France: on 24 August 2020, the competent authorities of France and Luxembourg extended the amicable tax agreement of 16 July 2020, which shall subsequently apply from 14 March 2020 to 31 December 2020.

As such, cross-border employees working from home due to the COVID-19 crisis will continue to remain taxable in the Member State where they would have normally worked (i.e., Luxembourg) —subject to their election for this taxation at least until (i) this year-end for Belgian and French tax residents and (ii) end of September for German tax residents.

As a quick reminder, the social security measures have also been extended until the end of December 2020.

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Contacts

Pierre-Jean Estagerie
Partner – Global Employer Services
Tel : +352 45145 4940
pjestagerie@deloitte.lu

Marleen Vandenput
Managing Director – Global Employer Services
Tel : +352 45145 4216
mavandenput@deloitte.lu

Frederic Scholtus
Director – Global Employer Services
Tel : +352 45145 3368
fscholtus@deloitte.lu

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