France and cross-border workers in the context of COVID-19


Agreements between France with Belgium, Germany, Switzerland, and Luxembourg, respectively, have been extended through March 31st, 2020. The agreement with Italy has not yet been extended beyond December 31st, 2020.

The mutual-agreement procedure provided for in each of the respective tax treaties was used to agree a common position to exclude from home-country taxation compensation related to “exceptional” COVID home working. The French tax administration announced last week their extension through March 31st, 2021.

As regards social security, the French authorities have announced that within the EU, the consequences of remote work or temporary displacement due to Covid-19 are neutralized until June 30th, 2021.

What is the change?

Workdays carried out in a taxpayer’s country of residence as a result of COVID-related measures may be considered as days worked in the country in which the taxpayers would have carried out his or her activity.

What does the change mean?

  • With respect to Belgium, Germany, or Switzerland:
    • Individuals who work from home, who would have otherwise habitually worked in the other country, and who would not have engaged in homeworking in the absence of specific COVID measures: Individuals making such election to exempt income in France should be in a position to provide employer certification, as well as proof of taxation in the country of employment.
    • Frontier workers (as per the treaty definition) also benefit from specific tolerances when assessing if they meet the threshold of days they can work outside of their habitual work country.
  • With respect to Luxembourg:
    • French Homeworking days resulting from COVID-related measures are not taken into account for the 29-day limit for exclusive taxation in Luxembourg.
  • Home-working situations outside of the scope of these mutual agreements could potentially lead to taxation in such country. For example, a non-resident of France who does not habitually carry out employment activity in France, and who works from a secondary residence in France, could generate French taxation on such employment income.

The agreement has been extended to apply to workdays exercised between March 14 through March 31st, 2021.

The tax and social security authority web links are listed below.

Deloitte’s view

These mutual agreements are a welcome simplification for employees and employers who are concerned by the tolerance, and we applaud the extension of these agreements to March 31st, 2021.

The mutual agreements are specific and numerous situations remain unsolved; it is therefore necessary to for employer to keep track of the populations that are / were displaced to assess their obligations. In addition, the employer will need to issue certificates to the concerned employees in order to benefit from the tolerance.

It is important to note that no agreement was published with regards to other European countries where workers were displaced from or to (such as the UK, Spain, the Netherlands…). We therefore recommend to carry out a full review of the employee’s whereabouts and of the corresponding employer and employee obligations, in order to ensure compliance in France and the other concerned countries.

Etienne Boyé

Partner in the Global Employer Services department, Etienne has over 13 years of experience in International Mobility. He advises multinational groups in France and abroad in managing their mobile employees. […]

Romain Ressiguier

Romain has been working for more than 10 years in international mobility, assisting individuals as well as multinationals assignees (both Foreign and French Companies) with their French tax (income tax, […]