Update COVID-19 and cross-border employment: agreements with Germany and the Netherlands extended

As announced in our previous newsflashes, Belgium has concluded several agreements with almost all of our neighboring countries (i.e. Germany, the Netherlands, France and Luxembourg). These agreements implement a mutual force majeure tolerance for cross-border employees in relation to the COVID-19 (travel) restrictions.

Based on the specific Belgian-German agreement of 6 May 2020, if certain conditions are met, the employment income linked to the “home working days” solely due to the measures taken by the governments of these two countries to combat the COVID-19 pandemic, may be deemed to be spent in the state (Belgium or Germany) where the cross-border worker would have exercised the employment in case no such measures had been taken.

In our newsflash of 7 May 2020, we mentioned that the tolerance applies retroactively as from 11 March until 31 May 2020 but that it could be extended if the competent authorities of both countries timely decide to do so.  This week, it was announced by the Belgian tax authorities that this mutual agreement with Germany is indeed extended until 30 June 2020.

A similar extension is now also applicable for the specific agreement of 30 April 2020 between Belgium and the Netherlands. Indeed, the application of this agreement is also extended up to 30 June 2020.

The abovementioned extensions are now in line with the (initial) duration of the specific (and more recent) agreements concluded between Belgium and France/Luxembourg.

It remains to be seen whether any further extension (beyond 30 June 2020) will be made applicable.

If you have any further questions, please do not hesitate to contact Sandrine Schaumont or Philip Maertens.