Global menu

Our global pages

Close

Coronavirus - DTA Luxembourg and DTA Netherlands – Cross-border commuters (“Grenzpendler”) working in their home offices - Germany

  • Germany
  • Tax planning and consultancy

17-04-2020

German-Luxembourg cross-border commuters

Luxembourg and Germany have concluded a mutual agreement (Verständigungsvereinbarung) for Covid 19 related home office activities (für Corona bedingte Home Office Tätigkeiten) on 3 April 2020, which relates to the application of the cross-border commuter regulation (Grenzpendlerregelung) in the Double Tax Treaty (DTT) between Germany - Luxembourg dated 23 April 2012:

  • Concerning Covid 19 related home office activities, each activity is deemed to have been performed in the contracting state in which the employee would have carried out his or her activity without the Covid 19 pandemic.
    Example: Where an employee, who usually lives in Germany and works in Luxembourg, has to work in his home office in Germany due to the Covid-19 pandemic, his activity is deemed to have been performed in Luxembourg.
  • This exemption rule only applies to Covid 19 related cases. It does not apply if the employee is working in his home office in accordance with the provisions under his employment contract.
  • The remuneration relating to the home office activities must be taxed in the respective “state of activity” to be exempt from taxation in the state of residence.
  • The home office activities, which are caused by the Covid 19 pandemic require appropriate documentation. However, it should be sufficient, if the employer issues a certificate disclosing the working days during which the employee has carried out his activities in his home office due to the Covid 19 pandemic.

The aforementioned regulations apply to activities conducted between 11 March 2020 to 30 April 2020. They will be extended by one month, unless the mutual agreement will be terminated by a contracting party one week before the beginning of the following calendar month.

Cross-border commuters between Germany and the Netherlands

As in case of the DTT with Luxembourg, Germany has signed another mutual agreement with the Netherlands related to the application of the DTT between Germany and the Netherlands dated 12 April 2012, concerning Covid 19 related home office activities and days spent idly at home on 6 April 2020.

The agreement between Germany and the Netherlands contains comparable provisions regarding working days in the home office as set out in the German-Luxembourg agreement dated 3 April 2020.

However, in contrast to the German-Luxembourg agreement, the German-Dutch agreement provides further rules for days spent idly at home. If the employee spends one or more days which would normally be working days (i.e. not a holiday) at home (i.e. without carrying out his work) and continues to receive remunerations from his employer, these are deemed to be treated as home office days due to the Covid 19 pandemic.

These provisions apply initially to activities conducted between 11 March 2020 and 30 April 2020 and will be extended by a month, unless the agreement will be terminated by a contracting party at least one week before the beginning of the following calendar month.

Cross-border commuters between Germany and Austria

According to the press release of the Federal Ministry of Finance (Bundesministerium der Finanzen) dated 3 April 2020, a comparable bilateral arrangement is being sought with Austria regarding the DTT treatment of cross-border commuters in the light of the Covid 19 pandemic.

Additional links

Press Release of the Federal Ministry of Finance dated 3 April 2020

Mutual Agreement between Germany and Luxembourg dated 3 April 2020

Mutual Agreement between Germany and the Netherlands dated 6 April 2020