Citing a worrying decline in cross-border workers and restrictive tax rules, the UEL has called for a major expansion of remote work allowances for non-resident employees.

The Luxembourg Employers' Association (UEL) has called for more flexible remote working rules for cross-border workers, arguing that current tax and social security frameworks hinder companies' ability to compete for talent.

In a statement released Wednesday, the UEL reiterated its longstanding support for more open teleworking legislation. The association linked its position to a recent decline in the number of cross-border workers from Germany and Belgium, a trend it describes as "all the more worrying as it disproportionately affects jobs that can be done remotely."

Up to 55 days of remote work per year

According to the UEL, employers are often unable to offer more remote work due to complex regulations. The core issue is a disparity in treatment: while Luxembourg residents can work from home without a formal cap, cross-border workers are generally limited to 34 days per year under international tax agreements.

Exceeding this threshold can trigger additional reporting requirements, costs, and the risk of a company being subject to foreign taxation. The UEL states that these concerns "hinder the possibility of remote working for Luxembourgish employers and their cross-border employees."

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The employers' group is now advocating for a more advantageous threshold, suggesting that cross-border workers should be allowed up to 55 days of remote work per year without punitive administrative or fiscal consequences.

To address this issue, the UEL is proposing the creation of a "safety sphere." This measure would push the administrative and tax constraints to a threshold beyond 25% of working time – equivalent to approximately 55 days per year, or roughly one day per week. This proposed allowance would be a significant increase from the current benchmark of 34 days.

The UEL's position is expected to influence upcoming discussions between the French and Luxembourgish governments, scheduled for 11 December. "It is now essential that Luxembourg takes the initiative to modernise the framework for cross-border remote working by establishing a sustainable, balanced, and advantageous solution for all," the employers' association stated.

In its advocacy, the UEL emphasises that remote working has "now become an asset for attracting and retaining talent." This is a weighty argument for Luxembourg's economic appeal, which the association suggests has been weakened since the Covid-19 pandemic.