Cross borders workers can normally work only 19 days from Germany per year or risk being taxed in their country of residence in addition to the income tax they pay in Luxembourg. This cap was first lifted during lockdown in March 2020.

Both countries have now agreed to extend the temporary measure until at least 31 March 2022, two years into the pandemic.

Days spent working from home because of pandemic measures will be considered as days worked from Luxembourg, the government said in a press release. Prime minister Xavier Bettel (DP) during a press conference last week had urged companies to allow staff to work from home as much as possible to help rein in the spread of the coronavirus.

Around 7% of infections reported between 22 and 28 November were traced to the workplace, the health ministry said in a weekly update.

“The extension until 31 March 2022 gives German cross-border workers and their Luxembourg employers the necessary flexibility and planning security in the fight against the pandemic,” finance minister Pierre Gramegna (DP) said in a statement, thanking the German government for its cooperation.

Around 50,000 people from Germany commute into Luxembourg. Similar agreements with France and Belgium are set to expire at the end of the year but are expected to be renewed ahead of this deadline. Luxembourg and Belgium in August the number of teleworking days for cross-border workers to 34, up from 24.

In addition to the double taxation exemption, countries have also reached consecutive deals suspending EU rules on social security affiliation.

Employees normally aren’t allowed to work more than 25% of their time outside of the country where their office is located or risk losing their social security in that country. This cap has been lifted since the start of the pandemic last year.