New dispensation to calculate the days of presence of Belgian tax residents in Luxembourg

Written by Nicolas de Limbourg 9 December 2015


Just before the summer holidays, the Belgian tax authorities have published a Practice Note (Practice Note AGFisc No. 22/2015 (No. Ci.700.520) dated 1st June 2015) regarding the amicable agreement of 16 March 2015 on the application of section 15 of the Belgian-Luxembourg treaty for the avoidance of double taxation.

The agreement has introduced, from 1st January 2015, a specific dispensation from the general requirement to evidence the physical presence in the State where the business activity is carried out to allow a tax exemption (with progressivity reserve) in the State of residence. Belgian residents may hence carry out their business activity up to 24 days per year outside Luxembourg (in Belgium or elsewhere), without however being taxed in Belgium.

Thanks to this new flexibility, on the one hand, business travel abroad (outside Luxembourg) or homeworking from the Belgian residence does not make these days taxable in Belgium (within the 24-day limit) and, on the other hand, Belgian tax residents may afford not to be able to evidence up to 24 days of physical presence in Luxembourg, without however being taxable in Belgium. On this last point, on 23 March 2015, the Belgian tax authorities also published a vade-mecum on evidence allowing to demonstrate the presence of a Belgian resident in Luxembourg (or elsewhere).

With the above Practice Note, the Belgian tax authorities further define the terms and conditions for applying the amicable agreement of 16 March 2015 and, more particularly, the method for calculating the 24-day threshold.