The Bill no 8311 déposé à la Chambre des députés le 20 septembre 2023 porte approbation de l’Avenant signé entre le Luxembourg et l’Allemagne le 6 juillet 2023 modifiant la Convention du 23 avril 2012 tendant à éviter les doubles impositions et à prévenir la fraude fiscale en matière d’impôts sur le revenu et sur la fortune.
This Amendment, which was signed in Berlin on 6 July 2023, suggests increasing the tolerance threshold applicable to taxation for German cross-border workers from 19 days to 34 days.This modification would thus allow residents of Germany who work in Luxembourg for a Luxembourg employer to carry out paid employment outside Luxembourg for 34 days, while remaining liable to pay tax in Luxembourg.
The Amendments also specifies “that paid employment is only regarded as having been carried out on a working day in a contracting State when the employment is carried out during a working day in this State for at least 30 minutes.”..
In addition, the Amendment stipulates that “actual days worked are to be regarded as all the days during a calendar year during which the employee actually carries out his/her paid employment and for which he/she receives remuneration”.According to the remark in the bill, “ Employment is also carried out when the employee is paid to be on call. On call bonuses can therefore be taxed in the country in which the individual is physically present even when the employee is not called upon to do anything. »
This threshold has been extended to include “ salaries which come under the scope of application of the civil service ”.
Furthermore, the Amendment specifies certain provisions relating to taxation on salaries and remuneration received by an employee during the notice period when gardening leave is imposed.. For salaries paid during the notice period if the employee has been released from his/her paid employment, these salaries should be treated as having coming from the State in which the employee carried out his/her work in the absence of gardening leave during the notice period.
In addition, “ severance pay paid within the context of an employment contract made up of back pay for wages salaries and other remuneration ” is subject to tax in the State in which the paid employment was carried out. The same is true for severance pay granted when an employment contract is terminated..
However, it is specified that “ if the employee has worked before the employment contract was terminated in part in his/her country of residence or in a third country and in part in the other country, the severance pay can only be taxed in the other country for the percentage applied to salaries received during the five years prior to the termination of the employment contract ”.
Where there are collective redundanciesthe severance pay that an employee receives by virtue of an agreement between the employer and the staff representatives within the context of these redundancies is only subject to tax in the country according to whose legislation this agreement was entered into.
It is specified that the Amendment will come into force as soon as it is ratified by the two signatory States and, for the abovementioned provisions, will apply as of 1st January 2024.
