On 17 March 2020, Luxembourg Government published a press release regarding tax measures to support businesses and the self-employed in the face of the COVID-19 pandemic. These key measures include:
Direct taxes
As long as they are experiencing liquidity problems as a result of the COVID-19 pandemic, legal and natural persons who make a commercial profit, an agricultural and forestry profit or a profit resulting from the exercise of a liberal profession may apply for:
- Cancellation of their quarterly income tax advances (corporate tax) and municipal business tax payments for the 1st and 2nd quarter of 2020. Cancellation of the advance net wealth tax payments is not applicable. The tax authorities have provided a template for this request on their website;
- Payment extensions for individual income tax, corporate income tax, municipal business tax, and net wealth tax. This is applicable only for tax due after 29 February 2020, and excluding any withholding taxes levied on employees’ wages. The tax authorities have provided a template for this request on their website.
Requests for cancellation of advances and payment deadlines are automatically accepted by the administration, requests should be made online. In addition, the deadline for submitting tax returns has been extended to 30 June 2020. This decision applies to legal and natural persons, as well as to taxpayers wishing to request, modify or revoke the selection of their individual tax scheme.
Value-added tax (VAT)
The VAT administration (AEDT) has announced that, due to the coronavirus pandemic, there is no administrative penalty for exceeding a deadline for filing VAT returns. This measure applies until otherwise indicated by the administration.
With regard to indirect taxes, the AEDT will reimburse from March 16 all VAT credit balances below EUR 10,000. This measure will address the liquidity needs of around 20,000 companies established in Luxembourg.
Belgian cross-border workers working from home
As a result of the public health situation related to the COVID-19 crisis, many cross-border workers will have to increasingly work from home in the coming days and weeks. The final protocol of the Belgian-Luxembourg Convention makes provisions for a rule of tolerance allowing a cross-border worker to exercise his activity for a maximum of 24 days outside the country usually worked in while remaining taxable in that country.
The Belgian and Luxembourg authorities have agreed that the current coronavirus situation constitutes a case of force majeure, for which no days are to be counted under the 24-day rule. It has been therefore decided that as of Saturday, 14 March 2020, the presence of a worker at home, in particular, to carry out telework, will not be taken into account in the calculation of the 24-day period. This measure is applicable until further notice.
