Tax & Legal

A revised double tax treaty has been signed with Luxembourg reflecting the current version of the OECD model.

The finance ministry has agreed with Luxembourg that redundancy payments and unemployment benefit shall be taxed in the country of the (former) employment.

The finance ministry has agreed with Luxembourg that road vehicle and train crews resident in the one country but working for an employer in the other shall tax their earnings in the country where they actually drive. If they drive in both countries on the same day the day’s earnings are split equally between the two.

Germany and Luxembourg have agreed to waive the split of remuneration of commuters, if less than 20 working days in the year were not spent in the country of employment and that country taxes the full amount.

The finance ministry has decreed a suspension of 2010 tax assessments on commuters to Luxembourg in respect of time spent in Germany whilst sick, on holiday or training.