A new amendment to clarify taxation between France and Luxembourg

Law No. 2025-139 of February 17, 2025: Another Step in the Fight Against Double Taxation and Tax Fraud

On February 17, 2025, France ratified Law No. 2025-139, which authorizes the approval of an amendment to the tax treaty between the French Republic and the Grand Duchy of Luxembourg. This measure aims to strengthen tax cooperation between the two countries, particularly to prevent double taxation and combat tax evasion.

Although this amendment has already been adopted and applied by many employers in Luxembourg, it is technically not yet in force, as it has only just been ratified by France. While this delay has created some anticipation, its impact remains limited. Indeed, the amendment will be applied retroactively from January 1, 2023, once it officially comes into effect, which is expected in 2025. Thus, even though the agreement has not yet been formally validated, its effects will be considered in place since the beginning of 2023.

What is the purpose of this law?

The amendment to the tax treaty between France and Luxembourg primarily aims to prevent double taxation of income. In practical terms, this means that individuals or businesses with economic ties to both countries will not be subject to double taxation on the same income. The amendment clarifies tax rules to avoid complex situations, particularly for cross-border workers or companies operating in both countries.

The amendment may adjust tax rates, specify residency criteria, and establish tax credit or reduction mechanisms to prevent double taxation while simplifying fiscal relations between France and Luxembourg.

Conclusion

Law No. 2025-139 represents a major step forward in simplifying tax relations between France and Luxembourg. By allowing the ratification of this amendment to the tax treaty, this law finally provides a practical solution for workers and businesses in both countries. It ensures greater legal security and strengthens tax cooperation between the two nations.

🔗 Read the full text here: https://www.legifrance.gouv.fr/download/pdf?id=IBEiqTSbr0lF-X35UuRM6J96WAkxk7JLKoUd3uP63A4=