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Income taxation
Germany, Belgium, France and Luxembourg
--> Wages and private salaries taxation
1. Cross-border worker
2. The non cross-border worker
-> Wages or public salaries impositions
-> Retirement Pension’s taxation
--> Useful addresses
--> Wages and private salaries taxation
Principles
When a person moves to another country to work, both States, the residence and the employment states can have the right to levy the income tax, according to their legislation related. In order to avoid double taxation, the States will have agreed fiscal conventions.
The principle, according to the fiscal conventions, will be the following: the activity incomes will be levied in the employment country except for Cross-border workers and the workers assigned whose taxes will be levied in their residence country
Notice ! there is no cross-border fiscal regime for the people working in Luxembourg no matter where they may have their residence. The cross-border workers working in Luxembourg will pay the activity income taxes in this country.
• If you work in Luxembourg
Principle : For your Luxembourg incomes, you will pay your taxes in Luxembourg.
Luxembourg withholds the tax at source, thus, at the time of your first professional activity in this country, and every following year, you will have to fill in a tax slip indicating your family situation and send it to the RTS office – Non Residents (see useful addresses)
Notice ! you have the obligation to fill in an income tax return in your residence country of the total of your incomes. If, apart form your Luxembourg incomes, you or your spouse have other incomes in the Sate of residence, the latter can take into account the incomes from Luxembourg in order to determine the taxable base of your residence State.
• If you work in Germany, Belgium or France
The bilateral agreements between these countries set what a cross-border worker is, in the fiscal sense.
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Cross-border worker
• Fiscal definition of cross-border worker
Every person (wage-earner or similar), no matter the nationality, fulfilling the following conditions will be considered as cross-border worker :
1-Anyone carrying out its professional activity in the border area of one State and having its residence in the border area of the other State,
2- and he/she returns each day in principle.
The fiscal agreements define the border areas as follows :
Germany / France :
- Should you work in Germany and reside in France: residence at Moselle, Bas-Rhin or Haut-Rhin and activity in Germany at less than 30 km from the border or at Sarre ;
- Should you work in France and reside in Germany: area limited by a distance of 20 km as the crow flies in both sides of the Sarre border.
Notice ! the French -German agreement admits the cross-border worker working outside the border area to preserve his/her status if the total duration of his tasks outside this area do not surpass 45 days of the year or 20% of the worked period if the latter is less than a natural year. The days off and sick leaves will not be included in the 45 days.
Belgium / France :
Area limited by a distance of 20 km as the crow flies in both sides of the borders.
There is an exact list of common borders for both border areas. This list is available at both EURES resources and documentation Centres (see useful addresses)
Notice ! as far as the French-Belgian cross-border workers are concerned, the agreement does not foresee anything related to activities carried out outside the border area. One day of work carried out outside the border area may represent the loss of the cross-border fiscal status and therefore the worker to be taxed at his employment country.
• Taxation at the residence country (formalities)
--> You reside in Belgium and you work in France
You have to sign, in duplicate, the 5206 statement to be obtained at the head office’s address of the related fiscal services.
These documents, once filled in by yourself and your employer, will have to be handed in to the Belgian taxation services governing your residence.
You will have to give your French employer the copy that the administration gives you in turn, and the employer, at will annex it, in due time, to the DADS 1 state of the paid salaries.
This document will have to be renewed every year and it will have to be given to the employer duly filled in before the payment of the first salary of the year. Should you change of employer during the year, you will have to fill in a new statement.
--> You reside in France and work in Belgium
In order to obtain the exemption of Belgian taxes (professional quantity on account), you will have to subscribe a demand on the application form number 276 Front. This form is available at the Belgian taxation services. Once you and your employer have filled in the form, you will have to hand it in to the competent tax services in your residence.
These services will keep a copy of the form and you will be given the second one which you will have to give to your employer. This document will allow your employer, effectively, not to withhold your professional quantity on account.
This procedure will have to be repeated every year and every time you change employer.
--> You reside in France and work in Germany
You have to subscribe a demand on the bilingual application form number 5011, available at the Tax Centre of your residence.This form will have to be handed in once.
This form will have to be handed in, directly by you or by your employer, when setting the working place in Germany in order to obtain an exoneration certificate (Freistellungsbescheinigung) excusing him from proceeding to the deduction at source.
This certificate is valid for 3 years but, your German employer will have to certify the statements of box II from the 5011 form and you will have to hand it in, in 3 copies to the French tax centre you belong to.
--> You reside in Germany and work in France
You have to fill in, in duplicate, the S 2 240 form, available at the Finanzamt of your residence. Once filled in by you and your employer, the two copies will have to be returned to the Finanzamt. The latter will give you a certificate to be given to your employer who will annex it to the statement of salaries.
The certificate is valid for a natural year. The wage-earner will have to present the demand during January. Should you start to work for your employer during the year, the demand will have to be presented in the month following the contracting date.
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The non cross-border worker
Should you not fulfil one of the conditions in order to be considered as cross-border in the fiscal sense, you will be taxed in your employment country. This taxation is done according to the fulfilment of certain formalities. (in order to know these formalities, you can inform yourself in the different fiscal competent services in your employment country, see useful addresses).
Notice ! You also have the obligation to fulfil a declaration in your residence country for the totality of your incomes.If apart from the incomes in your employment country you or your spouse has other incomes in the residence State, the latter can take into account the revenues from the employment country in order to establish the tax rate of your residence State’s incomes.
• You are an assigned worker
The remunerations you perceive in exchange of an activity carried out in country A will be, as exception, taxed in your residence country B if you simultaneously fulfill the following conditions:
- the period of time or the duration of the work in country A is not superior to 183 days in one natural year,
- the remuneration is paid by an employer non resident in the activity country A (the French-Belgian and French-Luxembourg agreements demand in addition, the employer to be established in country B),
- the responsibility of the remuneration is no to be supported by a stable establishment of the employer, set in country A where the activity is carried out.
A stable establishment is a fixed business facilities, by means of which the company carries out all or part of its activity. It can be a branch, a factory, a commercial address, a store, a building site whose activity is superior to 6 months.
Deduction of the 183 days: should you accomplish several periods in country A, during a certain year, the total duration of the periods will be deducted in order to establish the imposition State.
Notice ! the French-Luxembourg agreement contravenes this principle: it is set on the “mission duration” and not on the duration of the stay. Thus, should the duration of each mission not surpass 183 days (it does not matter if the total duration of the missions in the year surpass 183 days), you will be taxed in your residence State. The estimation of the duration of the stay or mission include the presence days, Sundays, public holidays, days of leave and temporary interruptions.
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--> Wages or public salaries impositions
These are incomes paid by public bodies and institutions.
Notice ! this definition changes from one country to another.
France/Luxembourg : incomes taxes in the paying State
Belgium/ France :
- incomes taxed in the paying State,
- should you have the nationality of the residence State, your incomes are taxable in the residence State
Belgium/Luxembourg, Germany/Luxembourg, Germany/France :
- incomes taxable in the paying State,
- should you only possess the nationality of the residence State (excluding any other nationality), your incomes are taxable in the residence State.
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--> Retirement Pension’s taxation
These are pensions paid within a social security legal regime
France/Luxembourg , Germany/France :
Pensions paid by one of the States are taxable in that State. This means that if you reside in France and you perceive a pension from Luxembourg, this one will be taxable in Luxembourg by means of a deduction at source.
Belgium/ France, Belgium/Luxembourg :
Private sector pensions are taxed in the State where the beneficiary resides. Thus, should you perceive a Belgian pension and reside in France, the latter will be taxed in France and exonerated on account in Belgium.
The Generalized Social Contribution (La Contribution sociale généralisée (CSG)) and the Contribution to the Repayment of the social debt (Contribution au Remboursement de la dette sociale (CRDS))
Cross-border workers resident in France are not liable to the CSG/CRDS on their incomes from activities coming from a foreign source.
Annabelle Daniau, Juriste, CRD EURES Lorraine
Joël de Marneffe, Juriste, Coordonateur EURES Transfrontalier PED
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--> Useful Addresses
~ Germany
Finanzamt Saarbrücken
Am Stadtgraben, 2-4
D-66 111 SAARBRÜCKEN
tel : 00 49 / 681 3000 0
fax : 00 49 / 681 3000 329
http://www.finanzen.saarland.de/
~ Belgium
Ministère des Finances
Services centraux de l’administration de la fiscalité des entreprises et des revenus
Tour des Finances
Boulevard du Jardin Botanique, 50 - Boîte 61
B-1010 BRUXELLES
tel : 00 32 / 2 210 38 16 – 17
fax : 00 32 / 2 210 41 18
http://minfin.fgov.be/
~ France
Services fiscaux départementaux de Meurthe-et-Moselle
Rue Jacques Bellange
CO N° 42
F-54036 NANCY Cedex
tel : 00 33 / 3 83 17 72 50
fax : 00 33 / 3 83 27 97 14
http://www.meurthe-et-moselle.pref.gouv.fr/
Services fiscaux départementaux de la Moselle
4, rue des Clercs – BP 91042
F-57035 METZ Cedex 1
tel : 00 33 / 3 87 55 88 00
fax : 00 33 / 3 87 36 87 47
http://www.moselle.pref.gouv.fr/
Centre des impôts des non-résidents
9, rue d’Uzès
F-75008 PARIS
tel : 00 33 / 1 44 76 18 00
fax : 00 33 / 1 44 76 19 90
http://www.minefi.gouv.fr/
~ Luxembourg
Direction de l’Administration des contributions directes
Section de la retenue d’impôts sur rémunérations
18, rue du Fort Wedell
L-2982 LUXEMBOURG
tel : 00 352 / 40 80 01
fax : 00 352 / 47 33 29
http://www.etat.lu/FI/
For more information, please contact the two resources centres in the Grande Région.
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