The elimination of double taxation, which is a crucial point of the new Franco-Luxembourg tax treaty which will come into force in 2021, has had the effect of a bombshell within the community of cross-border workers. Its impact, deemed at the time “zero or marginal” by political leaders, precipitated many mixed-income households – from Luxembourg and French sources – into a reality that was the opposite of the “win-win” that they had been sold .
From a few hundred euros to several thousand, the bill was salty for many. The discontent generated by this increase in income tax collected by France forced Bercy to momentarily backpedal, and to pronounce a suspension for two years (2021 and 2022), the time for the services to carry out an impact study. .
“An extension of the moratorium for one year”
However, “the expected study was not delivered in the summer of 2022 and seems to be dawning when the fiscal year has already begun”, indicates Emmanuel Bertin, close collaborator of the deputy for Thionville, Isabelle Rauch, very involved in cross-border issues. And the parliamentary attaché to ensure: “An extension of the moratorium for one year, that is what Isabelle Rauch pleads”. A scenario all the more plausible, that “there are only two months left before the launch of the tax return campaign (early April)”, recalls Séverine Bergé, tax specialist in Frisange. Discussions are still ongoing around this issue, which should lead to a new one-year suspension.
A status of the neighboring teleworker
“One way to compensate for this increase would be to resort to teleworking beyond the tolerance threshold of 34 days so that the days worked outside Luxembourg are taxed in France rather than in Luxembourg, the tax scale there being more favourable”, points out Séverine Bergé. And this is all the work carried out by the European authorities who are working on the creation of a status for the neighboring teleworker – not to be confused with that of the posted worker. For the parliamentary attaché: “It is a question of finding the right balance so as not to fall into the social dumping illustrated by the famous Polish plumber”.
