As explained in our headlines of 7 March 2004 and 22 October 2003, Belgium and France intended to conclude a new tax treaty for avoidance of double taxation.
A sensitive point of discussion is the frontier workers' system. Frontier workers are indeed currently taxed in their country of residence and not in the country where the employment is carried out, which makes it a generally beneficial system for French frontier workers working in the Belgian frontier zone.
Belgian and French parliamentary questions have already been raised in 2003 and 2004. At that time, the Belgian and French Ministers of Finance answered that no agreement had been reached on the contents of this new treaty, but that negotiations were still running.
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Two recent Belgian parliamentary questions * (22 February 2005) have been raised on the negotiations progress regarding this frontier workers' system.
The Minister answered that negotiations were currently suspended. However, he reminded again that in the event that the frontier workers' system was to be abolished, the system would be expected to be phased out over a 15-year transition period.
The Minister also pointed out that the tax authorities were aware that the advantageous frontier workers' system can lead to tax evasion (fake address in France, moving of the worker only while family remains in Belgium) and that they will further investigate those cases.
