In December 2025, the French and Luxembourgish governments met in Luxembourg to sign multiple agreements. Although some success was achieved in areas such as university education and healthcare, the French delegation left the meeting in some frustration due to disagreements.
After skipping the planned press conference, French minister Benjamin Haddad took a train to Metz, on which he told Virgule journalists that “the numbers do not add up”. He expressed particular disappointment at the lack of progress on the subjects of remote work and compensation for unemployed cross-border workers.
Remote work remains a principal concern for French cross-border workers, as they must work around a tax threshold of just 34 days a year. This threshold acts as a barrier for Luxembourgish companies, who generally block any working from home out of fear of incurring additional administrative costs in France.
For the French government, the question of benefits for unemployed cross-border workers is more important. In addition to funding the benefits for former cross-border workers itself (as stipulated by European regulations), France must also contend with a derogation that allows Luxembourg to reimburse a maximum of only three months of benefits, while other European countries can reimburse up to five. As a result, in 2023 alone, France incurred a loss of €137 million due to Luxembourg cross-border workers who were now unemployed.
With over 127,000 cross-border workers employed in Luxembourg, France feels it is not being adequately compensated for its contribution to Luxembourg’s economy. Its coffers are empty and it is time to stop giving “gifts” to neighbouring countries, even if such gifts would be beneficial to its own cross-border workers who would appreciate an increase in the 34 day threshold.
In an interview with RTL Infos in February, Moselle MP Isabelle Rauch said on the subject: “But why increase it [the 34 day threshold]? It’s a threshold beyond which workers have to pay taxes in their country of residence. For a majority paying taxes in France is more advantageous than paying them in Luxembourg, so there is no reason to raise this tax threshold.
On the other hand, we do need to simplify the tax return process, because we are notorious for its complexity. So we either need to simplify it or establish an intergovernmental mechanism for tax recovery. But under no circumstances do we need to change this threshold.”
The French ambassador to Luxembourg, Christophe Bouchard, explained that negotiations on remote work are still ongoing and are currently split between two proposals: Luxembourg would agree to a tax threshold of 45 days (approximately one day per week), while France is proposing 90 (approximately two days per week). However, the ambassador also emphasised that France does not simply want to sign an agreement without any concessions. “We think there is a loss of tax revenue for France that has to be compensated one way or another, so that’s where discussions are at.”
As for Luxembourg, there is no question of a transfer of funds. The Grand Duchy retains codevelopment as its chosen strategy to keep control over its finances. The issue of compensation unemployed cross-border workers is likely to drag on, as Luxembourg favous a European solution, which would take longer than a bilateral agreement. The next intergovernmental commission will take place in the year’s second quarter, so it remains to be seen if both sides can agree.
