by Lieven Goossens and Hannelore Durieu
Is your company being called on to carry out work in Luxembourg? Then there are a number of fiscal and social issues that you, as an entrepreneur, need to take into account. If you carry out work in Luxembourg, you must always follow the local rules of that country. To help you on your way, we have listed a number of tax and sodial benefit issues in a nutshell.
If your employees are working in Luxembourg, you must apply for a social badge from the ITM (or inspection du travail et des mines) for each employee before starting work. In addition, the company itself and the self-employed persons must also report their activities in Luxembourg.
Anyone who works abroad must carry an A1 certificate at all times. This A1 certificate proves that you are paying social security contributions in Belgium. Anyone who cannot produce this certificate may be fined for this.
Complete all the formalities on time
It is important that these formalities are completed before work begins in Luxembourg. We therefore recommend that you finalise the formalities well in advance. Even if you only carry out one day's work in Luxembourg, you will have to complete the social security documents beforehand.
The tax issues mainly apply to work in the real estate sector. If you carry out real estate work in Luxembourg, you must charge Luxembourg VAT to your client on the invoice. In this situation, the reverse charge rules cannot be applied. As a service provider in Luxembourg, you will therefore have to apply for a VAT number and submit a VAT return.
If the construction work takes longer than six months, you will have a permanent establishment in Luxembourg in accordance with the Belgian-Luxembourg Double Taxation Convention. The presence of a permanent establishment means that the portion of the profits related to the construction site in Luxembourg will be taxable in Luxembourg. In Belgium, these profits will be exempt. The company will have to file a tax return in Luxembourg for this purpose.
Do you want to carry out work in Luxembourg, but you are unsure about which formalities you need to carry out for this? We will gladly take care of these formalities for you! Contact one of our specialists via email@example.com.
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
Read our latest insights and news releases to stay abreast of changes in your industry.