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Belgium, Netherlands Reach Agreement on Cross-Border Telework

Posted on May 5, 2020

Belgium and the Netherlands on April 30 signed an agreement that will allow cross-border workers forced to work from home because of the coronavirus to be taxed by their country of employment.

Belgian Finance Minister Alexander De Croo announced the agreement May 4 on Twitter, saying that working from home because of the coronavirus “should not have negative tax consequences.”

Under the Belgium-Netherlands tax treaty signed June 5, 2001, and amended by a 2009 protocol, workers who live in one country and work in the other have their income taxed by their country of employment, not the country of residence. But as the coronavirus shut down workplaces and borders, many commuters were forced to work from home — a situation the treaty provides no exception for.

The April 30 agreement between Belgium and the Netherlands allows the country of employment to continue taxing income of cross-border employees who are now working from home, with retroactive effect from March 11 through May 31. This period may be extended if needed. The agreement also includes provisions for taxing coronavirus temporary unemployment benefits.

Belgium has entered into similar agreements with France and Luxembourg. Belgium’s Ministry of Finance announced March 13 that the Belgian and French authorities will not take into account the presence of French cross-border workers at their residences in France when calculating residency for tax purposes.

On March 17 the Belgian government said that the 24-day rule from the Belgium-Luxembourg tax treaty will not be enforced until further notice. That rule allows taxpayers to work up to 24 days per calendar year outside Luxembourg without being subject to taxation in Belgium.

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