Cross-border tax relations: what is the status of French positions with Belgium, Luxembourg, and Switzerland?
As international mobility intensifies, remote work becomes the norm, and assets extend beyond borders, tax treaties between France and its European neighbors show signs of obsolescence. In April 2025, official responses from the French Government confirm a desire to maintain the status quo with Belgium, Luxembourg, and Switzerland—at the cost of increasing uncertainties for taxpayers.
Belgium: A Tax Framework Inadequate for the Generalization of Remote Work
A Stagnant Tax Agreement Despite the Rise of Remote Work
Since 2020, a European framework agreement allows up to 50% of remote workdays without altering the applicable social security regime. However, the Franco-Belgian tax treaty of 1964 limits this threshold to only 30 days, causing a regulatory blockage in the face of growing demands for flexibility from cross-border workers.
Status Quo Confirmed by France
In a ministerial response dated April 3, 2025, the Government indicates that there are currently no plans to renegotiate the 2021 tax treaty, which was signed but never ratified. This inaction maintains the application of outdated rules, ill-suited to the daily reality of cross-border workers.
Concrete Consequences for Taxpayers
The lack of evolution creates a gray area for cross-border workers, exposed to risks of double taxation or complex tax regularizations. In the absence of clear harmonization, particularly between European labor law and national taxation, legal insecurity persists.
Switzerland: A Lack of Framework for Cross-Border Successions
Termination of the Succession Treaty Since 2014
Since France unilaterally denounced the Franco-Swiss treaty of 1953 regarding successions, no new bilateral framework has been established. This situation leaves families with assets or heirs in both countries in a concerning legal gray area.
A Contested Unilateral Approach
According to the Government's response on April 3, 2025, to a parliamentary question, no renegotiation project is planned. France relies on its internal law (articles 750 ter and 784 A of the CGI) to address cross-border situations, although this corrective remains complex to implement.
Risks of Double Taxation and Heavy Procedures
In the absence of a bilateral agreement, successions between France and Switzerland can lead to redundant taxation. Affected families, particularly in border regions like the French Genevois or Valais, face significant administrative burdens and sometimes inequitable treatment.
Luxembourg: Towards a New Logic of Cross-Border Taxation
The Imputation System Comes into Effect
Since 2024, the 2018 tax treaty between France and Luxembourg is fully applied. The main change is the abandonment of the exemption system in favor of imputation. Specifically, income earned in Luxembourg by French residents is now integrated into the overall income with a tax credit mechanism.
A Tax Increase for Some Households
This reform, while not resulting in formal double taxation, can lead to a heavier tax burden for mixed households (income in France and Luxembourg). Households with a significant imbalance in income distribution are the most affected.
Accompanying Measures, but a Negative Perception
To mitigate these effects, France has implemented several measures:
- Maintaining a transitional regime until the end of 2023
- Allowing 34 days of remote work without French taxation
- Creating a dedicated tax office in Moselle
Despite these advances, many cross-border workers feel a sense of tax injustice.
A Constant Tax Policy, but Distant from Ground Realities
France justifies its approach as aligned with OECD principles: combating double exemption and preserving the national tax base. However, this macroeconomic vision clashes with the realities experienced in border regions. Regulatory immobility generates administrative complexity, legal insecurity, and, for some, increased taxation.
Reforming Tax Treaties: An Urgency in the Face of International Mobility
In light of enduring phenomena such as remote work, increased expatriations, and transnational inheritances, a thorough reform of bilateral tax treaties is essential. Modernized agreements, taking into account local specificities and socio-professional developments, have become indispensable to restore equity and clarity.
Conclusion: April 2025, a Status Quo that Penalizes Taxpayers
As of April 3, 2025, despite multiple challenges and calls for modernization, France maintains its tax positions towards its three neighbors. This caution prevents effective adaptation to the realities faced in highly exposed areas such as the Grand Est, the Alps, or the Belgian border region.
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