French border workers who have the possibility to telework in the context of the covid-19 pandemic will remain taxed in Luxembourg until 30 September, the Ministry of Finance confirmed on Tuesday afternoon.
"I welcome this new extension of our agreement with France. The amicable agreement is in line with the decisions taken previously. I thank our French partners for this very good cooperation", said Finance Minister Pierre Gramegna (DP) in a statement.
A few hours earlier, the Ministry of Social Security had announced the extension of the existing agreement until 30 September, so that French border workers could continue to be covered by Luxembourg social security, even if they work more than 25% of their time in their country of residence.
A different threshold for each country
In terms of taxation, each neighbouring country has a bilateral agreement with the Grand Duchy which sets a threshold for the number of days that frontier workers may work outside their country of employment while remaining taxed there. It is set at 29 days per year for French frontier workers, 24 days for Belgians, but could be increased to 48 days at the next "Gäichel" summit, scheduled for 7 July. Finally, German cross-border workers are subject to a 19-day threshold.
For the latter, the tax agreement concluded in the context of the covid-19 pandemic is automatically renewed each month until one of the two countries concerned objects. This applies to both taxation and social security.
At the end of 2020, Luxembourg had 207,415 cross-border workers, i.e. 46% of all employees in the country. The French are in the majority (53%), ahead of the Germans (24%) and Belgians (23%).