Germany and Luxembourg recently announced that they had reached a new agreement on the treatment of frontier workers who may be caught between their respective tax systems as a result of the changed working practices necessitated by the pandemic.

The authorities explained that they have signed a new agreement providing for concessionary tax treatment for frontier workers during the COVID-19 crisis which confirms that employees working from home due to the COVID-19 crisis may remain taxable in the state in which they exercised their professional activity before the health crisis.

This agreement applies to income from employment, including from public sector employment, and replaces the cross-border worker deal that had been agreed in April 2020. The new agreement applies from March 11, 2020, until December 31, 2020, and will be automatically extended on a monthly basis until it is cancelled by one of the two jurisdictions.

For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look

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