Following an agreement made with the Netherlands, Belgium has now also concluded an agreement with Germany to regulate the tax situation of cross-border workers. Due to the coronavirus measures, many Belgian and German cross-border workers work in their country of residence. This may have consequences for the applicable tax rules. On 6 May 2020, Belgium and Germany therefore concluded an agreement clarifying the situation of cross-border workers in the context of the COVID-19 health crisis.
Home working days
A Belgian resident who is employed in Germany is, in principle, taxable in Germany on the remuneration he receives for that employment. The same rule (taxation in the State of employment) applies to a German resident who is employed in Belgium.
Because of the measures taken by the German or Belgian governments to combat the COVID-19 pandemic, many Belgian and German cross-border workers are working in their country of residence.
Belgium and Germany have therefore agreed that, for salaried cross-border workers, these home working days may be treated as days worked in the country where the workers would normally have worked, provided that these home working days are taxed in the other country.
This fiction cannot be applied to working days that the cross-border worker would have spent working from home or in a third State, independently of the measures to combat the COVID-19 pandemic. More specifically, it is not applicable to cross-border workers who, in accordance with their employment contract, generally carry out their employment from home.
Cross-border workers who use the fiction are obliged to apply it consistently in both Contracting States and to keep the necessary data (e.g. a written confirmation from the employer indicating which part of the home working days was carried out exclusively because of the measures related to the COVID-19 pandemic).
These agreements between Belgium and Germany apply from 11 March 2020 until 31 May 2020. After 31 May, they will be renewed on a monthly basis until the end of the following calendar month if Belgium and Germany agree to do so at least one week before the beginning of the next calendar month in question.
We are glad to help you
If you have any questions about the agreement concluded between Belgium and Germany, please contact our Legal Partners by email on firstname.lastname@example.org or by phone on 02/549.30.20.
Source: Notice FPS Finance, Belgium-Germany Double Taxation Treaty: agreement between competent authorities on homework carried out during the COVID-19 health crisis.