We refer to our HRS Headline No. 164 regarding the French-Belgian frontier workers regulation.
As announced in our previous Headline, Belgium and France are negotiating a new enclosure to the French-Belgian double tax treaty on the changes to be made to the French-Belgian frontier workers regulation.
On 14 March 2007, the Belgian Finance Minister announced that the Belgian frontier workers working in France would become taxable in France as from 1 January 2007 onwards. French frontier workers working in Belgium would become taxable in Belgium, unless they already qualified as frontier workers before 1 January 2009. In other terms, as from 1 January 2009, it would no longer be possible to hire French frontier workers who could benefit from the frontier workers regulation and thus pay their personal taxes in France on their Belgian-sourced salary income.
Finally, this version of the enclosure has never been approved by the Belgian Parliament.
A new enclosure has now been negotiated between France and Belgium (1) providing for the following confirmations/changes compared to the previous (non-approved) enclosure:
- The frontier workers regulation will be totally abolished for the Belgian frontier workers with retroactive effect as from 1 January 2007;
- French frontier workers can still fall within the scope of the existing frontier workers regulation until 31 December 2011 (instead of 31 December 2008);
- A phase-out period of 22 years is provided for as from 1 January 2012;
- Belgian residents who move to France after 1 January 2009 can no longer fall within the French-Belgian frontier workers regulation (in order to avoid abuse of the French-Belgian frontier workers regulation in the coming three years);
- French frontier workers will only lose their status of French-Belgian frontier workers when they spend more than 30 days out of the frontier area on a calendar year basis;
- French seasonal workers working in Belgium will only lose their status of French-Belgian frontier workers when working more than 15% out of the frontier area;
- The list of communities making part of the frontier area has been slightly modified;
- Belgian municipal taxes will be due by Belgian residents receiving earned income which is exempted from Belgian personal taxes based on the Belgian-French double tax treaty and this as from income year 2008;
It is to be noted that this revised Enclosure still has to be approved by both Parliaments.
