As we have previously discussed, Luxembourg has developed solutions with its neighboring nations to ease the economic burden of the COVID-19 pandemic on workers. Specifically, Luxembourg authorities worked with their counterparts in Belgium, France and Germany to develop measures to minimize workers’ tax and social security concerns and implications when cross-border workers telework.
On September 22, 2021, Luxembourg and Belgium agreed to extend their amicable agreement on tax considerations until December 31, 2021. Because the COVID-19 pandemic is a case of force majeure, days that workers work remotely are not taken into account for the purposes of taxing remuneration in their home countries. Put differently, this agreement avoids double taxation and prevents fiscal evasion with respect to taxes on income and capital when cross-border workers work remotely in Belgium for the benefit of their Luxembourg employers.
Luxembourg’s amicable agreement with Belgium on social security, which provides that teleworking will not influence workers’ social security standing, also applies until December 31, 2021.