Are teleworking conditions stable enough for cross-border workers in Luxembourg? Cross-border teleworking is currently governed by two main thresholds: a tax limit of 34 days per year and a social security threshold. While the tax framework remains unchanged, French lawmakers are seeking to reinforce the social security rules at European level.
During the Covid-19 pandemic, teleworking across borders was temporarily unrestricted. In 2023, several European countries, including those in the Greater Region, signed a renewable five-year framework agreement allowing employees to work remotely from their country of residence for up to 49.9% of their working time (or 2.5 days a week) without changing their social security affiliation. Previously, EU rules capped telework at 25%.
However, because the current framework can be revised or revoked, French MP Isabelle Rauch (Horizons) has proposed formally embedding the 49.9% threshold into EU legislation to make it permanent across all member states. The proposal, brought forward by the European Affairs Committee, is intended to be submitted to the European Commission to open discussions on revising the rules.
In addition to ensuring long-term security for cross-border teleworking, the proposal would also be a step toward broader expansion and greater flexibility. “We know that many cross-border workers do a bit of telework before leaving home and a bit when they return, which would help ease traffic congestion. It’s also a common-sense, environmentally friendly measure,” adds MP Rauch.
The proposal further addresses how remote work is calculated. Under existing legislation, any telework performed on a given day counts as a full day, explains Julien Dauer, Director of Frontaliers Grand Est. This method does not reflect actual working patterns, as some employees work remotely for short periods before or after commuting.
The suggested reform would allow telework to be calculated in hours or as a percentage of total working time, rather than by full days. “It’s an interesting idea because it would also help align tax and social security thresholds,” acknowledges Dauer.
Supporters of the proposal say a more precise calculation method could simplify compliance and reduce inconsistencies between the 34-day tax threshold and the 49.9% social security limit.
Undeclared teleworking is one of the practices the MP aims to address. “We know there is underreporting by companies and employees. But this leaves workers unprotected in the event of a workplace accident or an inspection”, warns Rauch. “If something happens to a teleworking employee who underreported their hours, what protection do they have? It’s extremely risky.”
The French proposal further suggests exploring a tax redistribution mechanism between states. Under such a system, income tax would be allocated proportionally to the country where the work is performed. Similar arrangements already exist in certain Swiss cantons. Currently, if cross-border workers exceed the 34-day tax threshold, employers must apply more complex tax procedures involving the country of residence.
Currently, no such simplified redistribution exists. Luxembourg companies must carry out complex declarations and deduct taxes owed in the country of residence if the 34-day tax threshold is exceeded. This would benefit France, which wants to facilitate remote work, but not without financial compensation from Luxembourg.
Discussions between France and Luxembourg on adjusting the tax threshold have so far not resulted in any agreements. French officials thus argue that revising EU legislation could offer a more stable solution instead.
