Cross-border teleworking after COVID-19 (i.e. after 30 June 2022)

Are you an employee who has been teleworking cross-border as a result of the COVID-19 measures and who will continue to do so after COVID-19? Or, do you as an employer have employees in that situation? Then 30 June 2022 is an important date. This is specifically the case for employees who are teleworking in Belgium, the Netherlands, France, Luxembourg or Germany.

During COVID, Belgium had concluded mutual COVID-19 agreements with its neighbouring countries (the Netherlands, France, Luxembourg and Germany) implementing a fiction for the homeworking days exercised by the employee. As a result of this, homeworking days were deemed to be executed by the employee in the state where he would have exercised his employment in a regular situation.

These COVID-19 agreements, and with that the fiction, have definitely ended on 30 June 2022. This implies that homeworking days exercised outside the state of the employer will be taxable in the home country of the employee. As a result, taxation will shift from the state where the employer is located to the home country of the employee.

30 June 2022 marks the end of the fiction in terms of taxation, and would initially also mark the end in terms of social security. However, during the European Administrative Commission mid-June, an agreement was reached to establish a new transitional period up until 21 December 2022 for social security purposes.

The objective of this transitional period is to allow all parties concerned to adapt to the changed working patterns and to allow Member States as well as the Administrative Commission to investigate specific situations to see whether a structural change of the applicable rules would be necessary. Consequently, until that date, teleworking days will not be taken into account to determine the employee’s applicable social security legislation. Cross-border teleworking will only imply a change of your applicable social security legislation, or the legislation of your employees, as from 1 January 2023.

However, a Limosa notification (if applicable) is again mandatory as from 1 July 2022 (this notification was not due during the Covid-neutralization period).

Working from home or teleworking as part of the ‘new normal’ does not only have consequences in terms of applicable taxation and social security. It may also have an impact on the following:

Applicable labour legislation and existing labour agreements (annex needed)
Teleworking policies (that will need to be established or updated)
Compliance (specific formalities apply such as the request of an A1-declaration or Limosa)
Current payroll administration (that will need to be adjusted) and possibly the need to process a payroll in the home country of the employee
The employer’s remuneration policy
The employee’s additional pension build-up
Etc.

Clearly, the above is a major change that requires your attention. If you have questions, or if you need any assistance in this respect, do not hesitate to contact the following members of our Belgian IMS-team. They can discuss with you the implications that teleworking as from 1 July 2022 (or as from 1 January 2023) may have on your situation or on the situation of your employees and talk you through the steps to be taken to make sure you remain compliant.

Ben Peeters
ben.peeters@bdo.be

Lien Maerevoet
lien.maerevoet@bdo.be

Nancy Slegers
nancy.slegers@bdo.be