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Belgium and Luxembourg Extend Double-Taxation Protection of Cross-Border Teleworkers

By: Edward Kowalski, Esq. | 03 Dec 2021

Citing the continuing concern about COVID-19 and the need to fight the spread of the virus, the governments of Belgium and Luxembourg have extended an agreement until 31 December 2021 that governs the taxation of teleworking cross-border workers.

An announcement issued by the Luxembourg Ministry of Finance on 9 September 2021 explained that under the agreement, which has been extended by the two countries several times since the beginning of the pandemic, the days during which cross-border workers are required to work from their homes due to measures taken to combat COVID-19 are not counted as days worked in the state of residence of the border worker. More than 48,000 Belgians working in Luxembourg are affected by the extension. A copy of the COVID-19 cross-border agreement is available on the Belgium Ministry of Finance website.

Earlier, at a meeting on 31 August 2021 the two countries agreed generally to amend their double-tax treaty to increase from 24 to 34 the number of days that a worker can work from home without a change in tax status. The change is effective 1 January 2022 and is intended to promote and facilitate teleworking for cross-border workers. Luxembourg's Minister of Finance explained that the agreement "is an important step towards more flexibility for the tens of thousands of Belgian cross-border workers and their Luxembourg employers, and for the post-COVID period."

Edward Kowalski, Esq., is Manager, Payroll Information Resources, for the American Payroll Association