Apply for an A1 form in advance
An A1 form is used to prove your continued Belgian social security coverage while carrying out temporary work in Luxembourg. Anyone doing business in Luxembourg temporarily must be in possession of this document. Be sure to request A1 certificates of coverage for the duration of your work in Luxembourg in advance, both for yourself and for any accompanying employees.
Apply for social badges for all employees
In addition to an A1 form, employees working in Luxembourg temporarily must also carry a social identification badge. It is therefore important to obtain these badges in good time. The social badge is a professional ID card and is used by the labour inspectorate to determine compliance with Luxembourg labour law for your employees, for example regarding medical fitness, adequate skills, minimum wage and working hours.
Beware permanent establishment
If you carry out construction work for longer than six months, in accordance with the double taxation treaty between Belgium and Luxembourg, this is considered a permanent establishment. Once you have a permanent establishment, the portion of your profits related to this Luxembourg construction site will be taxable in Luxembourg as well. It may be possible to obtain an exemption from Belgian taxation for such profits. To do so, your company will need to file a Luxembourg tax return.
What about labour inspections?
Labour inspections of foreign service providers are increasingly frequent in Luxembourg. These inspections monitor your compliance with all the obligations noted above. A failure to comply will result in the imposition of an administrative fine. The fine’s (initial) amount may vary between EUR 750 and 3,000, depending on the number of violations. If you do not agree with the imposed fine, it is possible to dispute it. In that case, be sure to engage a legal advisor to support you.