The 24 day-rule between Belgium and Luxembourg: as of 2022 up to 34 days

The so-called “24 day rule” of the double tax treaty concluded between Belgium and Luxembourg will now be amended. Recently, the Ministers of Finance of Belgium and Luxembourg, Vincent Van Peteghem and Pierre Gramegna, agreed to continue to promote and facilitate teleworking for cross-border workers. As of 2022, a Belgian resident who works in Luxembourg for a Luxembourg employer will not become taxable in Belgium on his professional income if he works outside of Luxembourg for maximum 34 days (and vice versa). This tolerance allows Belgian cross-border workers to work more from home or outside Luxembourg and this for maximum 34 days without becoming taxable on their professional income in Belgium (and vice versa).

Taxation of employment income in a Belgian-Luxembourg cross-border context

In order to determine which country will be entitled to levy income tax on employment income, the tax treaty between the residency country and the working country will be applicable. In principle, the salary is taxed in the residency country, unless it is performed in another country. Based on the double tax treaty concluded between Belgium and Luxembourg, there is an exception on this rule which determines that the residency country can still levy income tax on the employment income if:

The employee does not spend more than 183 days during any 12-month period that begins or ends during the calendar year in the working country and ;
The salary is not paid or borne by an employer in the working country and ;
The salary is not borne by a permanent establishment or fixed base of the employer in the working country.

So in principle, any working day performed outside of Luxembourg, by a Belgian resident who works for a Luxembourg employer, is subject to tax in Belgium.

Exception on the principle of article 15 of the double tax treaty between Belgium and Luxembourg: the 24 day-rule

However, based on a mutual agreement between Belgium and Luxembourg, a Belgian resident who is employed in Luxembourg and who is physically present in Belgium or a third country to perform professional activities for a period or periods not exceeding a total of 24 working days, will remain taxable in Luxembourg (i.e. the usual working country). This provision is not applicable when the double tax treaty between Belgium and the third country permits the third country to tax the income relating to the professional activities in that third country. The same applies for Luxembourg residents who are employed in Belgium. This tolerance now goes up to 34 days which is an additional 10 days which can be spent at home or outside the usual working state (not considering the Covid-19 tolerances which are about to expire).

In case any further questions in light of cross-border topics, do not hesitate to contact us!

Valerie Audenaert
valerie.audenaert@bdo.be

Andries De Prijcker
andries.deprijcker@bdo.be