n 14 December 2023, the Deputies voted on the increased taxation tolerance threshold for cross-border workers who live in Germany and work in Luxembourg. The text is currently awaiting the approval of the Council of State of the second voting round required by the Constitution.
The Addendum signed on 6 July 2023 in Berlin in amongst other things modifies the taxation tolerance threshold, thereby allowing workers who live in Germany and who work in Luxembourg to pursue their activities as employed persons for 34 days per year outside of Luxembourg (State of residence or any other third State) whilst remaining subject to the Luxembourg tax regime. This tolerance threshold has been expanded to include the " salaries which come under the scope of application of the civil service ”.
The amended text also specifies that a paid activity shall be deemed to have been carried out during a working day in a Contracting State only when said activity was carried out during a working day in this State for at least 30 minutes.
In addition, it is specified that “ all days over the course of a calendar year during which the employee effectively performed his paid activity and for which he receives pay shall be considered as actual working days ». De plus, « an activity shall also be (deemed to be) carried out by the performance of paid on-call duties. ”.
The text also clarifies certain provisions regarding the right to tax on-call availability allowances as well as salaries and remunerations received by employees during notice periods in the event of dismissal with the employee not required to work his/her notice (see our newsflash of 22 September 2023).
It is now for Germany to ratify this Addendum for it to take effect and for the aforesaid provisions to be implemented from 1st January 2024.
