Question 17985 — cross-border workers

Summary

Mr. Alexandre Dufosset draws the attention of the Minister of the Economy, Finance and Industrial, Energy and Digital Sovereignty to the consequences, for cross-border workers and their spouses, of the new methods of eliminating double taxation provided for by the Franco-Luxembourg tax convention of March 20, 2018. Salaries corresponding to an activity carried out in Luxembourg remain taxable in this State. However, French tax residents must also declare all of this remuneration in France. The administration thus calculates the French tax on the entire household income, before granting a tax credit corresponding to the portion of the French tax relating to Luxembourg income. If this mechanism is intended to avoid legal double taxation of the same income, it can nevertheless lead to an increase sensitive to the tax owed by couples where one member carries out his activity in Luxembourg and the other in France. Indeed, taking into account Luxembourg income can increase the tax rate applied to the spouse's French income. For the households concerned, this development therefore translates into an effective increase in their tax burden. Questions also remain regarding the Luxembourg revenue base must be declared in France. Cross-border workers are particularly invited to declare their remuneration before deduction of tax paid in Luxembourg, including bonuses and overtime. However, some of this remuneration may benefit from an exemption or a special tax regime in Luxembourg. Their integration into the “worldwide” household income can thus contribute to raising the rate applied to French income, even though they have not been taxed in the State in which the activity is carried out. The question arises in particular for overtime, which also benefits, under certain conditions and within certain limits, from an exemption under French tax law. The taxpayers concerned also report difficulties in obtaining uniform and sufficiently precise explanations from the tax services on the calculation. of their taxation, including with services specializing in the taxation of cross-border workers. The MP therefore asks the Minister to specify the exact methods for determining the Luxembourg income taken into account for the calculation of the French tax for households receiving income in both France and Luxembourg. In particular, he wishes to know whether bonuses and overtime exempted in Luxembourg must be fully withheld and whether overtime worked in Luxembourg can benefit from the exemption provided for by French tax legislation. Finally, he asks whether the Government intends to assess the financial consequences of the new calculation method for the couples concerned, strengthen the information provided by the tax services and consider the necessary measures to avoid an increase. disproportionate of their imposition.

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