Allowing cross-border commuters to work from home where possible is part of the strategy to contain the spread of the coronavirus Frédéric Antzorn

Allowing cross-border commuters to work from home where possible is part of the strategy to contain the spread of the coronavirus Frédéric Antzorn

Cross-border commuters from France are normally allowed to telework just 29 days per year or face paying income tax in their country of residence. The cap was first lifted during lockdown in 2020. A deadline set for the end of March to resume the normal system has now been pushed back until the end of June.

“The Franco-Luxembourg agreement on teleworking for cross-border workers makes it possible to contain the virus and offers maximum legal security to employers and employees in our two countries. This extension once again illustrates the good understanding between our two countries,” said finance minister Pierre Gramegna (DP), thanking France’s Bruno Le Maire for the cooperation.

Luxembourg previously announced a similar agreement with Belgium, lifting a 24-day remote working limit until 30 June.

A deal with Germany is yet to be announced. Here, only 19 days of remote working without double taxation are allowed.

Neighbouring municipalities in France and Germany have pushed to receive compensation payments from Luxembourg on tax revenue they are missing out on because of the large number of cross-border workers. While employees work outside the country, they still use public infrastructure in their country of residence, they have argued.

Luxembourg has said it would not make such payments, despite having an agreement of this type in place with Belgium, which receives €30m annually.

German public broadcaster SWR in 2019 said Rhineland-Palatinate was losing €50m in tax revenue annually because of cross-border workers. The region’s finance minister had lobbied Berlin to start talks at government-level with Luxembourg.