Can good news hide less good news? French crossborder workers with mixed incomes have been granted a further reprieve from the application of the tax treaty between France and Luxembourg, which was signed in 2018 and ratified in 2019. This year, French crossborder workers will still be able to declare their Luxembourg income in France (for tax year 2023), after deducting social contributions and taxes paid in Luxembourg. But this will be the last time, the French Finance Ministry warned. This year, the “effective rate” method will still apply to those with mixed income (French and Luxembourg). Regarding the new principle included in the agreement signed in 2018, the system provides for a tax credit (imputation method) in which only social contributions will be deducted from Luxembourg income declared in France as “worldwide income”. The French tax is then calculated on the total income, minus the tax already paid in Luxembourg in the form of a tax credit to neutralize the French tax burden. To avoid “heavy” double taxation, the French resident will benefit from a tax credit equal to the amount of tax paid in Luxembourg, which will be deducted from the tax due in France. While the French Minister of the Economy, Bruno Lemaire, has publicly stated that the treaty will have no impact, the OGBL stresses that this method is not neutral, and in 2020, when the attempt was finally abandoned, some taxpayers saw their tax burden increase by a few hundred to several thousand euros, depending on the case. The negative impact on French crossborder workers is likely to be all the greater if the level of income from Luxembourg turns out to be well above the median income and French income is much lower. This is likely to be the case for many French crossborder workers with mixed incomes, both salary and pension, especially as one year of pension contributions in Luxembourg is equivalent to 4-5 years in France! Where is the neutrality in all this? With this new method of globalization desired by the French government, three situations arise: The higher the income on the Luxembourg side and the lower the income on the French side, the greater the tax increase. a smaller tax increase in the case of balanced incomes little or no impact if the French income is high compared to the Luxembourg income. It is important to remember that French crossborder workers with no income in France are not affected by this new calculation method. However, Luxembourg residents with French income may be affected. An impact study was commissioned by the French Ministry of Finance, but the results have never been published. Consequently, the exact impact is unknown. The OGBL, which has been involved in this matter from the outset, calls for transparency and for the publication of this impact study in the name of tax justice. Finally, the OGBL calls on the French Minister of Finance to respect his commitments to ensure that the application of the new treaty is neutral for all concerned. Article published in the “Aktuell” (3/2024)
Deadlines for sending work incapacity certificates from abroad: OGBL seeks solutions On April 3, an OGBL delegation consisting of Jean-Luc De Matteis, Jacques Delacollette and Christian Simon-Lacroix met with Nadine Welter, First Advisor to the Minister of Labor, assisted by Armin Skrozic and Linda Dioniso, to discuss the issue of delays in sending work incapacity certificates. The obligation for cross-border workers to submit a certificate of incapacity for work to their employer or representative by the 3rd day of their absence is becoming increasingly difficult in practice, given the longer postal delays following the reorganization of postal services in France, but also in Belgium and Germany. In order to enable many cross-border workers to fulfil their obligation to notify their employer and submit a certificate of incapacity to work in good faith, the OGBL has proposed an amendment to the current legislation. In particular, in order to provide employers with a guarantee that they will not be left in a state of uncertainty as to the duration of the employee’s absence, it was proposed to strengthen the obligation of the employee to notify the employer (or his representative) in person and to submit the certificate by other means, such as e-mail. The OGBL also informed the Ministry’s representatives that the issue of postal deadlines also arises in the context of pre-dismissal interviews, since in these cases the time between the letter and the date of the interview is so short that the interview may take place before receipt of the letter – which obviously does not even allow the employee to attend. The ministerial delegation, aware of these problems, has indicated that it will study these issues with a view to proposing a possible amendment to the Labor Code.
Update on the taxation of French cross-border workers The soap opera on the future Franco-Luxembourg tax treaty continues. The impact study promised by the French authorities has still not been produced, but thanks to the efforts of the OGBL, its application has been postponed for another year. The news broke a few weeks ago: the application of the new Franco-Luxembourg tax treaty has been postponed for another year, as cross-border taxpayers could see when preparing their French tax returns. The OGBL welcomes this precautionary measure, which was requested by a Moselle deputy and supported by numerous French deputies from Lorraine. However, the file is not closed, since the famous impact study promised by the French government for 2021 has still not arrived and there are still no clear signs that the French tax authorities are questioning the discriminatory method of calculating the global tax. The OGBL, with the help of its cross-border sections, has spared no effort and has intensified its contacts in order to defend the purchasing power of cross-border workers and pensioners. The OGBL is opposed to the application of this agreement and calls on the ministers concerned to amend the tax treaty with a new rider which would ensure, for example, that taxes already paid in Luxembourg are deducted from the total income for the application of the French tax scale. This would only be fair and would constitute real tax justice. The French Finance Minister had promised “impact neutrality” in the application of the treaty, but this was not the case when the attempt was aborted in 2021. A number of cross-border workers and pensioners with mixed incomes have suffered substantial increases, ranging from 400 to 3,000 euros in some cases. Finally, it should be noted that the OGBL was the only union that actively defended the tax cause of cross-border workers: in addition to publishing a large number of press releases on the subject since 2020, we can also cite demonstrations organized in this context in Metz in October 2021 and May 2022, the questioning of candidates for parliament in Lorraine in 2022 and more than fifteen interviews with elected deputies between 2021 and 2023. After the 2016 tax reform in Luxembourg, which restored tax fairness between resident and French border households, and the now future implementation of the 2019 tax agreement, French border households with mixed incomes have the legitimate feeling of suffering, in stereo, a drastic increase in taxes and a consequent reduction in their purchasing power, which risks making Luxembourg less attractive in the long term. The OGBL cannot accept this situation. The OGBL will continue to monitor this issue closely. It also reiterates its call for the impact study promised by France to be carried out and presented to cross-border workers.
The OGBL shows lasting solidarity After several days of mobilization against the French government’s pension reform, French unions are calling for a day of strikes and blockades on March 7. Open-ended strikes have already been announced in several sectors and companies. As in previous days of mobilization, the OGBL once again expresses its solidarity with the French workers and their unions who are fighting against an unfair reform aimed at raising the retirement age, which is rejected by a large majority of the French population. A day of action began this morning with the unfurling of a banner on the A3 motorway near Dudelange reading “Tous ensemble pour nos retraites” (“All together for our pensions”). Later in the morning, an OGBL delegation will also visit a picket line in Moselle to lend its support. Finally, large OGBL delegations will take part in the demonstrations called by the inter-union in Longwy and Metz. On previous days of mobilization, OGBL delegations of up to 150 people have already taken part in demonstrations, especially in Metz. The French cross-border workers sections of the OGBL also play an active role in discussions within the local intersyndicales. Many French cross-border workers are directly or indirectly affected by the reform project. Many of them have mixed careers and/or spouses working in France. The OGBL once again calls on the French government to withdraw this draft reform immediately and announces that it will participate in all the actions that will take place after this first day of strikes and blockades. OGBL press release, March 7, 2023
Pension reform in France: OGBL in solidarity Faced with the massive attack on the French pension system led by President Macron and the Borne government, OGBL fully supports the French employees and their unions and participates as such in the mobilizations taking place in France. As a reminder: the French government wants to extend the duration of contributions to 43 years and postpone the retirement age from 62 to 64. Nearly three quarters of the French people are opposed to this reform. On January 19th, on the occasion of a first day of strikes and mobilizations, more than two million people mobilized throughout France. The OGBL participated, with a delegation of 120 activists, in the unitary demonstration organized by the unions in Metz, which gathered a total of more than 13,000 people. A new day of mobilizations is planned for January 31. The OGBL will again be present in Metz with a large delegation, together with the French employees and their unions. Many cross-border workers who are employed in Luxembourg are directly or indirectly concerned by the reform wanted by the French government: either because they have mixed careers, or because their spouse works in France. The OGBL therefore fully and actively supports the mobilizations in France and asks the French government to withdraw its pension reform project. Furthermore, it is also a question of warning the Luxembourg employers and their political allies: an attack on the Luxembourg pension system would in any case lead to a reaction similar to that of the French employees and their unions. Press release by the OGBL, January 30, 2023
Prise de position des candidats qualifiés pour le second tour des législatives 2022 L’application de la convention fiscale franco-luxembourgeoise du 20 mars 2018, signée en 2019 par les deux pays, « garantissait » qu’il n’y aurait pas d’impact pour les revenus salariaux et provenant des pensions des frontaliers français. Hélas, au moment de son entrée en vigueur, en 2020, la nouvelle convention fiscale a apporté une très mauvaise surprise aux frontaliers ayant des revenus mixtes, qu’ils soient mariés, veufs, salariés ou pensionnés et allant de quelques centaines à plusieurs milliers d’euros d’augmentation sur l’imposition annuelle. Malgré l’objectif de la convention (et de son avenant) qui est, en soi, sans équivoque, comme le stipule explicitement son titre (la convention vise à « … éviter les doubles impositions et (à) prévenir l’évasion fiscale en matière d’impôt sur le revenu … »), l’application ou bien l’interprétation de l’administration fiscale française, en ne prenant pas en compte directement les impôts payés au Luxembourg dans le calcul du taux sur les revenus mondiaux, entraine mécaniquement une hausse des revenus imposables et donc parfois une hausse significative du taux d’imposition appliqué sur l’ensemble des revenus du contribuable frontalier (ou du ménage) et par conséquent un prélèvement fiscal plus élevé. De plus, l’article 22 précise que « l’impôt payé au Luxembourg est calculé sous déduction d’un crédit d’impôt égal au montant de l’impôt payé au Luxembourg, toutefois ce crédit d’impôt ne peut excéder le montant de l’impôt français correspondant à ce revenu ». Il s’agit donc en quelque sorte d’une double imposition indirecte puisque le revenu pris en compte n’est pas exact, celui-ci prenant en compte des sommes déjà déduites à la source par le Luxembourg qui sont plus élevées que le crédit d’impôt théorique calculé. Ce qui est le cas pour une gamme étendue de revenus compte-tenu des différences de barème d’imposition entre la France et le Luxembourg. D’autre part, malgré les déclarations de 2019 qui garantissaient que les pensionnés et les veufs ne seraient pas impactés — sachant qu’ils ne peuvent pas modifier leur situation financière — ces derniers voient désormais, eux aussi, l’équilibre financier de leur budget brutalement menacé sans pouvoir changer la situation. Plus étonnant encore, cette convention a été signée sans qu’une étude d’impact sérieuse n’ait été menée de la part des services fiscaux français. Le gouvernement français, au regard de l’émoi très important qu’a suscité l’impact négatif de l’application de la convention auprès des frontaliers français, avait finalement décidé de faire marche arrière pour deux ans (années fiscales 2020 et 2021). Nous rappelons que les 145 000 frontaliers français salariés et pensionnés contribuent grandement à l’économie des régions frontalières dans le Grand Est. L’OGBL, en tant que premier syndicat luxembourgeois et premier syndicat pour les frontaliers français salariés et pensionnés, souhaite qu’il soit mis fin à l’application de la nouvelle convention, demande une nouvelle méthode plus juste pour mondialiser les revenus des frontaliers français (par exemple : déduire de la déclaration des revenus salariaux et de pensions provenant du Luxembourg, les impôts déjà payés à la source et changer la méthode de mondialisation, en reprenant la méthode de l’exemption comme dans l’ancienne convention en vigueur depuis 1958 pour ne pas recourir à la méthode d’imputation par crédit d’impôt qui revient à un système de double imposition sur des revenus déjà imposés à la source par le Luxembourg). Ci-dessous, vous trouverez les réponses à notre lettre ouverte envoyée aux 30 candidats qualifiés pour le second tour des législatives 2022 en Meurthe-et-Moselle, Meuse et Moselle (par département et par circonscription) en respectant l’ordre officiel des listes électorales. MEURTHE-ET-MOSELLE (54) Circonscription Candidat(e)s Nuance Prise de position Documents 1ère circonscription Mme Carole GRANDJEAN ENS 1ère circonscription M. Nordine JOUIRA NUP 2ème circonscription M. Emmanuel LACRESSE ENS 2ème circonscription M. Stéphane HABLOT NUP 3ème circonscription Mme Martine ETIENNE NUP OUI 54_circo3_6 3ème circonscription M. Xavier PALUSZKIEWICZ ENS OUI 54_circo3_12 4ème circonscription Mme Dominique BILDE RN 4ème circonscription M. Thibault BAZIN LR 5ème circonscription M. Philippe MORENVILLIER RN 5ème circonscription M. Dominique POTIER DVG 6ème circonscription M. Anthony BOULOGNE RN 6ème circonscription Mme Caroline FIAT NUP MEUSE (55) 1ère circonscription M. Bertrand PANCHER DVD 1ère circonscription Mme Brigitte GAUDINEAU RN 2ème circonscription Mme Anne BOIS ENS OUI 55_circo2_10 2ème circonscription Mme Florence GOULET RN MOSELLE (57) 1ère circonscription M. Grégoire LALOUX RN 1ère circonscription M. Belkhir BELHADDAD ENS 2ème circonscription Mme Lisa LAHORE NUP 2ème circonscription M. Ludovic MENDES ENS 3ème circonscription Mme Charlotte LEDUC NUP OUI 57_circo3_5 3ème circonscription Mme Françoise GROLET RN 4ème circonscription M. Michel RAMBOUR RN 4ème circonscription M. Fabien DI FILIPPO LR 5ème circonscription Mme Marie-Claude VOINÇON RN 5ème circonscription M. Vincent SEITLINGER LR 6ème circonscription M. Kévin PFEFFER RN OUI 57_circo6_7 6ème circonscription M. Christophe AREND ENS 7ème circonscription Mme Hélène ZANNIER ENS 7ème circonscription M. Alexandre LOUBET RN 8ème circonscription M. Laurent JACOBELLI RN OUI 57_circo8_5 8ème circonscription Mme Céline LEGER NUP 9ème circonscription Mme Brigitte VAÏSSE NUP OUI 57_circo9_1 9ème circonscription Mme Isabelle RAUCH ENS OUI 57_circo9_8 Nuances de Candidats DXG Divers extrême gauche NUP Nouvelle union populaire écologique et sociale RDG Parti radical de gauche DVG Divers gauche ECO Écologistes DIV Divers REG Régionaliste ENS Ensemble ! (Majorité présidentielle) DVC Divers centre UDI Union des Démocrates et des Indépendants LR Les Républicains DVD Divers droite DSV Droite souverainiste REC Reconquête ! RN Rassemblement National DXD Divers extrême droite