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.