On 23 July, Luxembourg law firm Arendt & Medernach published a client note dissecting Circular LG-Conv.D.I 61 issued by the Luxembourg Tax Administration on 24 June and now in force. The circular codifies the 34-day tolerance in the 2018 France-Luxembourg double-tax treaty, under which a French resident working for a Luxembourg employer can spend up to 34 working days per calendar year outside the Grand-Duchy—whether in France or a third country—without shifting any taxation rights to France. The guidance clarifies counting rules: travel days and part-days of remote work both eat into the quota; weekends attached to a business trip do not. It also introduces a proportional reduction mechanism for employees hired mid-year and confirms that if the threshold is breached, France may tax **all** income relating to days worked outside Luxembourg, not just the excess days. For the 120 000 daily commuters from Lorraine and Alsace, the clarification ends three years of pandemic-era uncertainty over work-from-home arrangements. Multinationals with shared-service centres in Luxembourg must now install robust time-tracking for cross-border staff and warn managers that ad-hoc telework, training trips or conferences in Paris risk triggering French PAYE obligations and payroll re-runs. HR teams are advised to align remote-work policies with the new guidance by 1 September, when Luxembourg launches its electronic reporting platform. Failure to document physical presence could expose companies to double taxation claims and penalties reaching 10 % of undeclared withholding. The French social-security ceiling for telework (34 days per year) remains unchanged, but audits are expected to intensify once tax data begin to cross-match with A1 certificates.
Source: Arendt & Medernach
