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France, Luxembourg Extend Cross-Border Worker Tax Deal

Monday, August 31, 2020

Luxembourg and France have agreed to extend an agreement that eases tax residency rules for cross-border workers affected by COVID-19 restrictions.

Under the 2018 France-Luxembourg double tax treaty, workers resident in one contracting state but employed in the other contracting state are considered taxable in the latter state when undertaking remunerated work in the state of residence, provided time spent working in the state of residence does not exceed 29 days in a year.

In response to COVID-19, the two states agreed on July 16, 2020, that days worked by a frontier worker in their state of residence owing to COVID-19 restrictions on movement will not be counted towards the 29-days rule in the treaty.

Luxembourg's Ministry of Finance announced on August 25 that both countries have agreed to extend the validity of the agreement to December 31, 2020.