Belgium – COVID-19: France, Germany Mutual Arrangements Extended

BE – France, Germany Mutual Arrangements Extended

The Belgian tax authorities announced that mutual agreements with France and Germany have been extended until 30 June 2021. The COVID-19 mutual agreements Belgium concluded in 2020 with neighbouring countries France, Luxembourg, Germany, and The Netherlands aim to avoid the negative tax consequences for cross-border workers at risk of having their employment income become fully taxable in their states of residence.

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CONTACTS

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The Belgian tax authorities announced that mutual agreements with France and Germany have been extended until 30 June 2021.1  This development follows on the heels of our earlier report (GMS Flash Alert 2021-083, 15 March 2021) concerning mutual agreements with Luxembourg and The Netherlands.

These extensions have been deemed necessary as the COVID-19 pandemic continues to impact public health.1  

WHY THIS MATTERS

The COVID-19 mutual agreements Belgium concluded in 2020 with neighbouring countries France, Luxembourg, Germany, and The Netherlands aim to avoid the negative tax consequences for cross-border workers at risk of having their employment income become fully taxable in their states of residence.  (For more details on the aims of the mutual agreements, see GMS Flash Alert 2021-083.)  Cross-border workers and their employers concerned about their tax treatment may find some relief in the extension of the application of these particular agreements.

Companies should carefully consider the situations of individuals working in more than one country or individuals that regularly worked from home or in third countries prior to the COVID-19 pandemic. 

KPMG NOTE

Belgium had previously extended until 30 June 2021, its policy of disregarding situations in which cross-border workers and multi-state workers increased the amount of time they work in their home country due to COVID-19 for social security purposes.  (For prior coverage, see GMS Flash Alert 2020-480, 4 December 2020.)

FOOTNOTE

1  The announcements can be found (in Dutch and French) at:

https://eservices.minfin.fgov.be/myminfin-web/pages/fisconet/document/e3b34a78-7c83-4ecc-8cbf-17e4023a0eba and

https://eservices.minfin.fgov.be/myminfin-web/pages/fisconet/document/93580f10-55db-4425-9042-11d15467f858 .

These agreements had been extended several times to 31 March 2021. (For prior coverage, see the following issues of GMS Flash Alert: 2020-230 (13 May 2020), 2020-247 (22 May 2020) and 2020-302 (7 July 2020).)

The information contained in this newsletter was submitted by the KPMG International member firm in Belgium.

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