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 23 September 2021, the amicable tax agreement of 19 May 2020 was extended for the sixth time by the Luxembourgish and Belgian competent authorities. The agreement now applies from 11 March 2020 until 31 December 2021.
• Germany: on 15 September 2021, Luxembourg and Germany have agreed that the amicable tax agreement will continue to apply until 31 December 2021.
• France: on 23 September 2021, the Luxembourgish and French competent authorities concluded a fifth amicable tax agreement. The COVID-19 measures will apply from 14 March 2020 until 31 December 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;
• France, which applied until the end of September 2021, have been extended until 15 November 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: