The difficult global situation of Covid-19 has forced all countries to take steps to reduce the spread of the virus and achieve its eradication as soon as possible. This is why Luxembourg’s Prime Minister Xavier Bettel announced on 17th March that, the declaration of state of emergency will be sent to Parliament and the Council of State for approbation, for a maximum of three months, in accordance with article 32.4 of its Constitution. Following this decision, updates involving different areas have also been put into force, all in order to ensure the continuity of the economy in Luxembourg.

In the area of taxation, indicate that the offices of the administration are only opened by appointment, which must be requested in advance. In addition, the following measures have been adopted:

  • Direct taxation: the deadline for submitting tax returns is extended to 30 June 2020. In addition, professionals and legal persons engaged in agricultural or forestry activities are granted the cancellation or postponement of quarterly advances on income tax or corporate tax and business tax for the first and second quarters of 2020. These requests are automatically accepted for eligible taxpayers who have advance payments to make.
  • Indirect taxes: greater flexibility is granted to the taxpayer, so that submission after the regulatory deadline in matters of value added tax will not lead to an administrative penalty until the Luxembourg tax administration establishes otherwise.

In the field of employment, the Financial Security Supervisory Commission (CSSF) recommends that companies should allow their staff members to teleworking from home in all cases where this is possible. In fact, a certificate proving the contractual relationship is required to be able to cross the German and Luxembourgish border.

In addition, it should be noted that the governments of Belgium, France and Luxembourg have announced that, until a new order is issued and given that this is a case of “force majeure”, homeworking does not count towards the threshold of 24 days (Belgium) or 29 days (France) which allows a cross-border worker to carry out his activity outside the country in which he usually works and remain taxable in that country. However, the risk of information fraud and computer security are also highlighted in the context of this remote working measure so that appropriate precautions would be taken.

Coronavirus crisis is posing significant challenges for all companies and in this context, information is essential. At Auxadi we are experts in providing value added services in accounting, tax compliance and international payroll management. If you need more information, please do not hesitate to contact us.

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Amaia Valencia
Accounting, Reporting & Compliance services

All information contained in this publication is up to date on 2020. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.