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


We refer to our previous newsflashes regarding the specific agreements that Belgium has concluded with almost all of its neighboring countries (Germany, the Netherlands, France and Luxembourg). These agreements implement a mutual “force majeure tolerance” for cross border employees in relation to COVID-19 (travel) restrictions. A fiction is created in relation to the employment income linked to the “home working days” solely due to the measures taken by the governments of respective countries to combat the COVID-19 pandemic. If certain conditions are met, these home working days are deemed to be spent by the employee in the state where the cross-border worker would have exercised the employment in case no such measures had been taken.

In our newsflash of 25 May 2020, we mentioned that the tolerance (agreed between Belgium and Luxembourg) applies retroactively as from 11 March until 30 June 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 Luxembourg is indeed extended until 31 August 2020.

Furthermore, in our newsflash of 7 May 2020, we mentioned that the tolerance (agreed between Belgium and the Netherlands) 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. In our newsflash of 2 June 2020 we already announced that the agreement with the Netherlands was extended until 30 June 2020. This week, a further extension was announced by the Belgian tax authorities. This agreement will now also be extended until 31 August 2020.

Until further notice, no (second) extension has been announced yet with regard to the agreements concluded between Belgium and Germany/France. However, we would anticipate a similar extension to become applicable for all these agreements.

We will follow-up on any further developments in this respect.

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