Teleworking of cross-border workers in Luxembourg: what will change in 2023
By Ninon Oget
Published on
At Luxemburgwhere around 100,000 French cross-border workers are employed, the telework has been talked about a lot since the health crisis linked to Covid-19.
To be able to work from home, these employees must respect certain rules that are set to change in 2023. We take stock.
Telecommuting benefit authorized in 2023
UN tax tolerance threshold is imposed on French border residents.
So far, this amounts to 29 days of teleworking authorized per year. If this number is exceeded, the employees concerned will be taxed in France.
Nevertheless, the Grand-Ducal Ministry of Finance reminds News Luxembourg that this “threshold of tolerance in tax matters will be increased from 29 to 34 days” from the income received in 2023.
France and Luxembourg have agreed to increase from 29 to 34 days the lump sum provided for by the supplementary tax treaty in order to take into account the development of teleworking for workers, residents of one of the two States and employed by a company located in the other state. The days worked within this 34-day limit will be represented and taxed as if they had been carried out in the state where the employer is located.
Simplified procedures for employers
For cross-border workers who respect this tolerance threshold, things will also change next year. And for good reason, article 3 of the finance bill was adopted by the French National Assembly last October.
In concrete terms, the procedures will be simplified for Luxembourg companies. They will no longer be obliged to collect tax for the French public treasury and to declare monthly the days teleworked in France: a simple annual statement the amount of remuneration taxable in France will suffice.
Income tax due in France will be debited directly from the employee’s bank account.
No immediate change for social security
In addition to the tax aspect, that linked to the social Security. As a reminder, a cross-border worker cannot telework more than 25% of his working time at the risk of no longer being affiliated to Luxembourg social security.
A threshold which will not undergo any modification in the immediate future: “There will be no change at the start of the year”, announces the Ministry of Social Security.
However, it is important to remember that the transition period has been extended until June 30, 2023. This allows French cross-border workers to telecommute without fear of changing their social security affiliation if the 25% threshold is exceeded.
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