Based on the agreements with Belgium and Germany, the employee may choose to have the income received for the days the employee works at home (solely due to COVID-19) to be taxed in the country where he would normally be working. This special choice is available only if the other country levies tax on this income. The other condition is that this country would also have taxed his income under normal circumstances. The employee must be able to provide a statement from his employer.
Since it has been announced that the agreements will not be extended after 30 June 2022, this would be a good time to reconsider the working at home policy for employees living in Belgium or Germany. From 1 July 2022 the income for the days worked at home will again be taxable in the country of residence, as usual. Many countries have largely repealed the COVID-19 measures. This may also have an impact on the COVID-19 EU agreements on the social security position of employees. Developments should be monitored, closely.
Should you have any questions with respect to the above, please contact your trusted adviser or one of the tax advisers of our Employment & Benefits team