It took Belgium 2,044 days to give a legal basis to the 24 days of telework authorised for Belgian residents employed in Luxembourg. On 16 March 2015, the then-Belgian federal minister, Johan Van Overtveldt (N-VA), announced an amicable agreement with the grand duchy. The agreement was retroactively applicable starting 1 January of the same year.
In order to be legal, this agreement had to be the subject of an amendment to the 1970 convention “for the avoidance of double taxation and the settlement of certain other questions relating to taxes on income and capital,” amended in 2002 and again in 2009. The drafting of this amendment took some time, as it was signed by the two governments on 5 December 2017.
But once again, things dragged on. So much so that, in May 2019, prime minister Charles Michel (MR) and Xavier Bettel (DP) jointly announced a new agreement, this time on 48 days of teleworking. “I can’t count the number of e-mails I received at the time from people who were legitimately asking for additional information and a date for the agreement to come into effect,” comments federal deputy Josy Arens (CDH), also mayor of Attert, who has always followed this dossier closely. “All professions combined. Except that I didn’t have it. Because this announcement had been made to the press, without informing the parliament or even the administration. And it had collapsed into the following reality: how to pass 48 days when the 24 days previously announced were not even legal.”
Unacceptable, says state council
The 2015 agreement and the 2017 convention still have no legal basis. This was scathingly pointed out by the state council in its comment on the bill finally submitted on 17 August 2021:
“In concluding this agreement, the competent authorities of the contracting states have clearly exceeded their competence, as provided for in Article 25, §3, of the Belgium–Luxembourg Double Taxation Convention. In principle, this agreement should therefore be qualified as a treaty, which, in accordance with Article 167 of the Belgian Constitution, can only have effect in the Belgian legal order after having been approved by the competent parliaments, and which can only be invoked against individuals after having been published in the Moniteur belge (a publication which diffuses official and public information in Belgium, Editor’s note). The administrative practice in execution of this amicable agreement applicable to wages, salaries and other remuneration relating to taxable periods starting on 1 January 2015 is therefore for the time void of any conventional or legal basis. The conclusion of the endorsement, which has now been approved, retroactively validates this practice. The fact remains that article 25, § 3 of the Belgian-Luxembourg DTA has been misused, which is unacceptable in principle.”
The many Belgian frontier workers contacted by the Belgian tax authorities who had to justify the fewer than 24 days of work outside Luxembourg their contracts stipulate will probably find these sentences somewhat bitter.
“I have put many parliamentary questions on this subject to successive finance ministers. I have never received a very clear answer,” continues Arens. He understands that too much commotion on this subject could have ended up generating disputes, the losers of which would have been the taxpayers.
24, then 48, and now 34
The icing on the cake: on 31 August 2021, a new amicable agreement was reached, this time for 34 days of teleworking... this while the 2015 agreement still had no legal basis.
“The minister of finance Van Peteghem (CD&V) has announced that it will become a reality in 2022,” concludes Arens. He will keep an eye on this, “just as [he] will continue to fight to ensure that the 48-day promise made in 2019 is kept.”
If Belgium proceeds at the same pace, it should be noted that the amicable agreement reached on 31 August 2021 will not have a legal basis, and will therefore only be valid for taxpayers 2,044 days later, i.e. on 6 April 2027.
This story was first published in French on Paperjam. It has been translated and edited for Delano.