Germany, France and Belgium COVID-19 cross-border personal tax measures: further 2021 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.

To mitigate the risk that these employees are taxed in their home state during this exceptional situation, amicable tax agreements were made 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 11 June 2021, the amicable tax agreement of 19 May 2020 was extended for the fourth time by the Luxembourgish and Belgian competent authorities. The agreement now applies from 11 March 2020 until 30 September 2021.
• Germany: from 1 January 2021, in the absence of any objection from both Luxembourg and Germany, the amicable tax agreement of 3 April 2020 is automatically extended for another month. This monthly automatic extension will continue until both parties officially renounce the agreement. As none of the countries renounced before the end of June, this agreement is valid until the end of July 2021, at least.
• France: on 17 June 2021, the Luxembourgish and French competent authorities concluded a fourth amicable tax agreement. The COVID-19 measures will apply from 14 March 2020 until 30 September 2021.

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, which applied until the end of June 2021, have been extended until the end of December 2021;
• Germany, which applied until the end of June 2021, have been extended until the end of December 2021; and
• France, which applied until the end of June 2021, have been extended until 30 September 2021.

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

For more information, please view: