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Germany and Austria Agree on Treatment of Virus-Stranded Workers

April 17, 2020, 12:02 PM

Germany and Austria have signed an agreement clarifying the tax status of cross-border workers forced to work remotely during the coronavirus outbreak.

The countries already have a treaty designed to ensure these workers aren’t taxed twice on the same income. Such treaties are common, but current restrictions on movement have the potential to cause double-taxation issues for people who cross borders to go to work. There is usually free movement between Austria and Germany.

  • The agreement, published late Thursday, means that Austrian residents who usually go to work in Germany but are unable to do so due to the virus can continue to claim short-term German unemployment and bankruptcy benefits, and vice versa.
  • Both countries have agreed that the workers will be allowed to consider days worked from home as days worked in the employing country.
  • The agreement entered into force April 15 and and applies to days worked since March 11. It will be renewed automatically at the end of every month.
  • Germany has recently signed similar agreements with Luxembourg and the Netherlands.

—With assistance from Barbara Tasch.

To contact the reporter on this story: Hamza Ali in London at hali@bloombergtax.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bloombergtax.com

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