Luxembourg: Summary of Recent Employment and Social Law Developments
In the past month, there have been several employment and social law developments, chief among them:
I. Belgian Cross-Border Workers and Taxation: Increase of the Tolerance Threshold from 24 to 34 Days
Luxembourg and Belgium have agreed on a permanent arrangement in tax matters allowing cross-border workers to work for a period of 34 days outside the State of usual activity, while remaining taxable in that State (currently: 24 days). All occasions where the individual worked in the country of residence or third-party country, will be taken into account when calculating the 29 days (including, in particular, days of telework). This agreement is valid beyond the context of the Covid-19 pandemic and will apply from 2022. Concerning the prolongation of the tax agreement reached in the context of the pandemic, discussions are currently underway. Click here to read the Government Press Release of 31 August 2021.
II. Extension of Family Leave
The Law of 14 September 2021 extends the same conditions to the derogatory regime of family leave introduced on 21 January 2021 until 18 October 2021, inclusive. The family leave request form relative to the Covid-19 pandemic, applicable as of 15 September 2021, is available here (in French).
 Law of 14 September 2021 amending […] the Law of 22 January 2021 concerning: […] 3° amendment of Articles L. 234-51, L. 234-52 and L. 234-53 of the Labour Code; 2° temporary derogation from the provisions of Articles L. 234-51, L. 234-52 and L. 234-53 of the Labour Code (Mémorial A no 669 of 14 September 2021).
III. Telework of German Cross-Border Workers: Extension of Tax Agreement
Luxembourg has agreed to extend the tax agreement with Germany until 31 December 2021. As a reminder, the agreement on social security that was reached with Germany is also in force until 31 December 2021. Thus, the days of telework performed continue not to be taken into account for:
- the calculation of the tolerance threshold for tax matters (19 days);
- the determination of the social security legislation applicable in order to avoid a change of affiliation in the event that the 25% threshold is reached or exceeded, in accordance with European provisions.