Extension of special tax and social security arrangements to fight against Covid-19 regarding telework for cross-border workers

Telework continues to be an effective tool in mitigating the spread of the Covid-19 virus. Luxembourg and its neighbouring countries have agreed to extend bilateral special agreements concerning telework of cross-border worker in order to avoid any implications on the applicable tax and social security regime.

Special tax arrangements are extended until 31 March 2022 as follows: 

1.    Luxembourg and Germany have decided that the amicable agreement governing the tax implications of telework, currently applicable until 31 December 2021, will be extended until 31 March 2022. Consequently, until that date, the days spent working remotely in accordance with the agreement will continue not to be taken into account when calculating the tolerance threshold of 19 days applicable to taxation.

2.    Luxembourg and Belgium have decided that the amicable agreement governing the tax implications of telework currently applicable until 31 December 2021, will be extended until 31 March 2022. The application of the agreement will then be extended automatically until 30 June 2022, unless terminated by written notification by either Luxembourg or Belgium at least 2 weeks before March 31, 2022. Consequently, until that date, the days spent working remotely in accordance with the agreement will continue not to be taken into account when calculating the new tolerance threshold of 34 days applicable to taxation.

3.    Luxembourg and France have decided that the amicable agreement governing the tax implications of telework currently applicable until 31 December 2021, will be extended until 31 March 2022. The application of the agreement will then be extended automatically until 30 June 2022, unless terminated by written notification by either Luxembourg or France at least 1 week before March 31, 2022. Consequently, until that date, the days spent working remotely in accordance with the agreement will continue not to be taken into account when calculating the new tolerance threshold of 34 days applicable to taxation.

Special social security arrangements are extended until 30 June 2022 as follows:

Luxembourg has agreed with Germany, Belgium and France to extend the exceptional provision of not taking into account teleworking days related to the COVID-19 crisis for the determination of the social security legislation applicable to cross-border workers until 30 June 2022. 

As a result, all cross-border workers who telework from their country of residence will thus continue to be affiliated with the Luxembourg social security system regardless of whether the 25% threshold of activity in their country of residence has been reached.