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Luxembourg and Germany Ease Cross-Border Telecommuting Limits

April 2, 2020, 6:42 PM

Germany and Luxembourg have agreed to ease tax treaty restrictions on the number of days cross-border workers are allowed to work from home amid the new coronavirus pandemic.

Days worked from home since March 11 won’t be added to the end-of-year calculations. The two announcedThursday to let them count as days worked in the usual country of employment.

  • Luxembourg’s tax treaties allow it to tax commuters from those three countries on their full employment income only if they work a specified number of days in Luxembourg; otherwise, they could be subject to double taxation.
  • The current arrangement stipulates that cross-border workers can work outside of their primary country of employment for a maximum of 19 days a year.
  • The measures will remain in place indefinitely.
  • “I welcome this agreement with our German neighbors, as it will offer German commuters more flexibility in their work and will guarantee Luxembourgish companies and banks the necessary security planning over the next few weeks,” Luxembourg Finance Minister Pierre Gramegna said.
  • Around 50,000 people who live in Germany commute to work in Luxembourg. The Grand Duchy struck similar agreements with Belgium and France in March, meaning all of its immediate neighbors are covered.

To contact the reporter on this story: Barbara Tasch in Zurich at correspondents@bloomberglaw.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; David Jolly at djolly@bloombergtax.com

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