France is yet another country delaying their income tax filing and payment deadlines due to COVID-19. With the initial state of emergency in place until May 24th, 2020, there are now issues with the current tax filing deadlines. As has been observed in many other countries, the deadline has been extended for one month in France and will be re-evaluated at the end of May when the state of emergency is currently scheduled to be lifted. This concession has been made in order to give the general population additional time to get their affairs in order before they are required to pay their taxes.
It is important to note that the deadline has only been extended for filing taxes in France and does not apply to withholding taxes on wages that must be paid to employees. It is expected that employers will continue to collect and hold taxes from employees’ wages so they can be properly filed and submitted whenever the tax filings take place.
In addition, the rules surrounding Frontier Workers has also changed at this time. Given the European Union allows citizens of any EU country to easily travel between countries, there is a sub-category of employees, classified as “Frontier Workers” who are generally citizens of Germany, Belgium and Switzerland. Since these Frontier Workers are now required to work out of their home countries, there were some initial questions about their status as if they continued working remotely. However, the governments have agreed that situations caused by COVID-19 would not impact the eligibility of these workers for their regular tax regimes.
Luxembourg has additional tax rules regarding Frontier Workers, with the common rule that salaries should be taxed in the country where the employee is working. The current treaty does have a 29-day limit where workers can cross the border for work for a maximum of 29 days without having remuneration taxable in the other country. The government has agreed that during the work from home mandate caused by COVID-19, any work done from home will not count towards the upper limit of the 29-day period.
