French-Luxembourg cross-border workers: tax rules for 2026

Over 110,000 French residents work in Luxembourg. The applicable bilateral tax convention establishes a specific tax regime whose filing implications are often poorly understood — particularly since remote working became widespread.

The principle: taxation in Luxembourg

The Franco-Luxembourg tax convention of 20 March 2018 (in force from 19 August 2019) provides that cross-border workers' salaries are taxed in Luxembourg, not in France.

France applies the imputation method: a tax credit equal to the French tax corresponding to the Luxembourg income is granted, neutralising French income tax on those revenues while keeping them in the taxable base. In practice, Luxembourg income feeds into the calculation of the effective tax rate applicable to the household's other French income (rental income, investment income, etc.).

Remote working from France

A Franco-Luxembourg mutual agreement sets a tolerance threshold of 34 days per year of remote working from France, without affecting the cross-border regime. Beyond this threshold, the portion of income corresponding to remote working days becomes taxable in France.

This threshold is calculated on a calendar-year basis.

Filing obligations in France

Luxembourg income must still be declared in France, even though the tax credit neutralises the French income tax:

• On the main form 2042, boxes 1AF/1BF (foreign-source employment income)
• On form 2047 for the breakdown of foreign-source income
• The tax credit is reported in box 8TK of the main form 2042

The French tax administration has had automatic information exchanges with Luxembourg since 2017.

Luxembourg income taxable in France

Certain Luxembourg-source income is taxable in France:

• Pension payments from private Luxembourg organisations
• Dividends from Luxembourg companies (subject to withholding tax and tax credit)
• Capital gains on disposals of shares in Luxembourg companies in certain cases

Social security: a separate threshold from the tax threshold

The social security threshold is separate from the 34-day tax threshold. Since 1 July 2023, a multilateral framework agreement (signed by France and Luxembourg) allows continued affiliation to the Luxembourg social security scheme if remote working represents less than 50% of working time — on request, with an A1 certificate valid for 3 years. Without this framework agreement (under common law, EC Regulation 987/2009), the threshold for switching to the French social security scheme is 25% of working time or remuneration.

Common filing mistakes

1. Luxembourg income not declared
The tax credit does not exempt from the obligation to declare: income must appear in boxes 1AF/1BF and the credit in box 8TK.

2. Exceeding the 34-day threshold undetected
Days of sick leave or holidays taken from France may also be counted in certain cases.

3. Impact on effective rate not anticipated
Luxembourg income enters the French taxable base under the imputation method. This can increase the effective rate applicable to the household's other French income (rental income, savings income, etc.).

A tax return unlike any other

Filing as a French-Luxembourg cross-border worker requires multiple forms, calculation of the effective rate, and particular attention to remote working. The pre-filled return generally does not reflect this complexity.

Fidencia.tax guides you through your filing taking into account your actual situation: remote working days, exempt income, effective rate, correct forms.

File accurately from the start — fidencia.tax

This article is provided for informational and educational purposes only. It does not constitute tax, legal, or financial advice. The rules presented are general in nature and may not apply to your personal situation. Consult a qualified professional (chartered accountant, tax lawyer, wealth management adviser) for any tax decision. Fidencia.tax is a filing assistance tool and does not replace professional advice.

Legal references: Franco-Luxembourg convention of 20 March 2018 (in force from 19 August 2019), amendment of 10 October 2019, CGI articles 4 A and 197 C.