Luxembourg’s finance ministry has been forced to row back on claims that German cross-border workers could offset a tax bill on overtime hours after a new treaty came into force between both countries.
Luxembourg and Germany signed a new double taxation treaty at the end of last year, which allows Berlin to levy income taxes on overtime hours worked in Luxembourg by staff residing in Germany, but which is not taxed in the Grand Duchy.
Last week, the finance ministry claimed that most workers will end up not paying any more in taxes as they could claim a tax allowance of about €12,800 on overtime income.
However, the ministry did a U-turn…
