With reference to our previous newsflashes regarding this topic, the idea behind the COVID-19 agreements lies in the fiction that salaried workers who work from home due to travel restrictions remain taxable in the state where they previously exercised their professional activity before the outbreak of the corona crisis.
However, this tax fiction strictly applies as long as the COVID-19 agreements are applicable.
In our Newsflash of 24 September 2021, we referred to the extension of the mutual agreements between Belgium and the Netherlands / France / Germany / Luxembourg until 31 December 2021.
Recently, the Belgian tax authorities and their French counterparts decided to (further) extend the application of the Belgian – French COVID-19 agreement until 31 March 2022. This extension still seems to be justified by the fact that the COVID-19 pandemic continues to impact public health. Moreover, it is now foreseen that (unless decided otherwise) the mutual agreement will be automatically extended (with another 3 months) until 30 June 2022. On that date the authorities will re-evaluate the evolution of the COVID-19 pandemic/measures and if necessary, they may then potentially decide on a new extension.
The above extension is also applicable to the specific force majeure approach that allows French frontier workers to work from their home (in France) without such days being considered as days performed ‘outside the Belgian frontier zone’, hence not triggering the loss of the frontier regime.
Furthermore, it is also clear that the Belgian and Luxembourg tax authorities agreed on the further extension of the mutual COVID-19 agreement between Belgium and Luxembourg until 31 March 2022 to ensure a greater predictability for cross-border workers and to offer maximum legal certainty to Luxembourg employers. This mutual agreement will in principle also be automatically extended until 30 June 2022.
Most likely the COVID-19 agreements with the Netherlands and Germany will be extended as well. We will of course follow-up on any developments in this respect.
If you have any further questions or concerns, please do not hesitate to contact Sandrine Schaumont or Philip Maertens.