France / Luxembourg cross-border workers: publication of an agreement dated 16 July 2020


On 16 July 2020, Luxembourg and French tax authorities published an agreement providing clarification on the number of days  French tax residents can work outside Luxembourg without being taxable in France on their employment income.


Article 14 paragraph 1 of the double tax treaty and point 3 of the related Protocol signed between Luxembourg and France on 20 March 2018 both address the taxation of employment income. On this basis, French tax residents employed by a Luxembourgish company can perform their activity outside Luxembourg (the usual work state) for a maximum of 29 days without triggering taxation in France.

If a French tax resident works for more than 29 days outside of Luxembourg for a Luxembourgish employer, the employment income related to the days when work was carried out outside Luxembourg becomes taxable in France as from the first day worked out of Luxembourg.

However, while setting up this 29-day threshold, the double tax treaty did not bring any clarification on how to compute it.


Based on the agreement, the 29 days tolerance is to be understood from a strict point of view. Any workday, whether full or partial, must be taken into consideration as one full day in the 29 days count, including trainings.

The 29 days count is to be assessed on a calendar year basis (i.e. from 1 January to 31 December). If an employee is under a part-time contract or did not perform his/her activity during a full calendar year (ex. under a fixed term contract), the 29 days count must be prorated. 

This strict approach follows the ones already in place for Belgian (24 days) and German (19 days) cross-border workers.

Example: A French tax resident performed as an employee for a Luxembourg based company under a part-time contract (80%) during the full year 2019. She performed outside Luxembourg as follows: 15 full days of home-based working, 5 partial days of home-based working, 4 days of training in Switzerland. As the maximum number of days worked outside of Luxembourg is above the 23-day threshold (29 * 80%, rounded down), the employee is taxable in France on the salary corresponding to the 24 days (15 + 5 + 4) performed outside Luxembourg.

The agreement lists the following type of workdays to be excluded from the 29 days count:

  • Annual holidays

  • Weekly rest days

  • Public holidays

  • Sickness days

  • Case of “force majeure” occurring outside the will of the employer / employee

Maternity / sickness payments paid by the social security authorities remain taxable in the source country.

Payments made for overtime are taxable where the activity has been performed.

Regarding unemployment income and garden leave payments, reference should be made to commentaries on article 15 under OECD model of tax treaties.

Documentation to be kept

In case of requests from the tax authorities, it's up to the employee to demonstrate that s/he did not exceed 29 workdays outside Luxembourg during a calendar year based on any proving documentation :

  • Employment contract, certificate from the employer;

  • Badging records;

  • Attending list to meetings;

  • Transport tickets (train, flights,…)

  • Hotels, rental car invoices;

  • Restaurants, cantines, fuel, material invoices from the state of activity

COVID-19 days to be excluded

Both French and Luxembourg tax authorities considered the sanitary crisis due to COVID-19 to be a case of “force majeure”. Therefore, days worked in 2020 by French tax residents outside Luxembourg from 14 March until 31 August are to be excluded from the 29 days count.

The 31 August deadline may not be final and may be extended depending on the agreements to be taken by both governments. 

1. Conversely, Luxembourg tax residents performing for a French based company can perform their activity outside France for a maximum of 29 days without triggering taxation in France following the same applicable rules as Luxembourg tax residents for the counting of days.

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Contact us

Michiel Roumieux

Partner, Personal Tax Leader, PwC Luxembourg

Tel: +352 49 48 48 3055

Eric Paques

Partner, Personal tax department, PwC Luxembourg

Tel: +352 49 48 48 3165

Julien Treffort

Partner, Personal tax department, PwC Luxembourg

Tel: +352 49 48 48 3349

Séverine Moca

Managing Director, People & Organisation, Personal tax department, PwC Luxembourg

Tel: +352 49 48 48 3205

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