Belgium, France, and Germany 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, France, or Germany.

To mitigate the risk that these employees are taxed in their home state during this exceptional situation, amicable tax agreements have been made between Luxembourg and neighboring countries. 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 Luxembourg and Belgian competent authorities. The agreement now applies until 31 March 2022. In the absence of any objection from both Luxembourg and Belgium within the two weeks preceding this date, the amicable tax agreement will be automatically extended until the end of June 2022.
• Germany: On 7 December 2021, Luxembourg and German competent authorities have decided that the mutual agreement concluded between Germany and Luxembourg on 7 October 2020 will continue until 31 March 2022.
• France: On 15 December 2021, the Luxembourg and French competent authorities concluded a new amicable tax agreement. The COVID-19 measures will apply from 14 March 2020 until 31 March 2022. In the absence of any objection from both Luxembourg and France within one week preceding this date, the amicable tax agreement will be automatically extended until the end of June 2022.

As such, the above-mentioned non-resident 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).
 

Social security

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

This is good news for Luxembourg-based employers and Luxembourg cross-border workers living in said neighboring countries.