The Belgium-Germany-Netherlands border region is calling on the governments of the three countries to introduce a unified tax system for cross-border workers. In a letter addressed to the
finance ministers of all three nations, the region highlights the challenges posed by home-based work, especially in the context of increased remote working due to the pandemic.
The cross-border Meuse-Rhine Euroregion encompasses areas along the border, including Limburg, Liège, and the East Cantons in Belgium. The Euregio, representing the region, has sent its proposal to Belgian Finance Minister Vincent Van Peteghem and his counterparts in Germany and the Netherlands.
Harmonizing Social Security Rules
The Euregio points out that since the pandemic, remote working has become more prevalent, leading to a framework agreement at the European level aimed at harmonizing social security rules. As of 1 July, cross-border agreements allow for up to 50% teleworking without requiring changes to social security systems. However, no such agreements have been reached regarding tax issues, which are not regulated at the EU level. Consequently, this lack of uniformity can result in significantly different tax situations in border regions, creating challenges for both workers and employers.
Maintaining a Cross-Border Labor Market
The letter emphasizes that this situation weakens the position of workers and makes cross-border work less appealing. It warns that the attractiveness of a cross-border labor market may diminish, leading to a loss for both employees and employers, particularly during a time when skilled labor shortages are increasing.
Telecommuting Statistics
According to statistics from the Meuse-Rhine Euroregion, around 43,000 workers commuted across borders in the Belgium-Germany-Netherlands region in 2019, just before the start of the pandemic. Since then, the health crisis has led to a significant rise in remote working across all three countries. Many Belgian companies now have one or two days of homeworking per week as the norm, while more than a quarter of companies offer employees the option to telecommute for three days or more.
The Meuse-Rhine border region is home to almost 4 million inhabitants and nearly 250,000 companies. Photo by Schlusmans, Frieda, Wikimedia commons.