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I am Portuguese and I have recently just moved to Luxembourg. I am planning on staying here for a while. However, I will be working remotely for a company that only has jurisdiction in certain European countries, such as Portugal and Germany.

My question is: Can I be living here and work for Portugal, for example? Or can I live here and work for Germany? I do not plan on returning soon to Portgual, neither am I planning to move to Germany, so I would not be eligible for a cross-border worker, right? Which country wold be better for me to work for while living in Luxembourg?

What type of consequences will I have in:

  • Taxes: will I be double taxed? To which country will I be taxing for? I know that Luxembourg and Portugal have a double tax aggreement, but how does that work?
  • Social Security: will I be allowed to use healthcare advantages in Luxembourg while working for another country?
  • How would my pension plan look like?
  • I also kindly accept additional valid points that I might be forgeting.
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  • This is something that a tax advisor can only advise correctly, based on the details of the mentioned double tax agreement. In most cases it must be dealt with by the employer. – Mark Johnson Dec 29 '20 at 19:05
  • When you write work for Portugal, do I presume correctly that you mean work for a Portuguese company, (as opposed to being employed by the state of Portugal)? Either way, you should probably edit your question to make this more clear. – Wrzlprmft Jan 8 at 8:05
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In situations like the one you explain there are three countries and jurisdictions involved:

  • Home country (H): The country which nationality you have.
  • Residence / work country (R): The country you live and work in de facto
  • Client's country (C): The country where the company which employs you or contracts you has its seat

In your case: H = Portugal, R = Luxembourg, C = you're not so clear on this

If H = R = C, it's simple. If R = C, it's quite a common case. If H != R != C then it can get complicated.

You will have to have a look at the following areas:

  • residence and / or work permit in country R
  • work permit in country C
  • taxation
  • social security

On taxation, the rule of thumb is that you need to pay your taxes in country R. Country R is usually defined as the country in which you spend 183 days a year or more. (NB: I wonder what would apply if I split my time between 3 countries with ~ 120 days each.)

This does not mean that you are not obliged to pay any taxes in country C. Just maybe you can deduct them from what you need to pay in R. This also depends a lot on if you are an employee in C or you provide services to a customer in C. This is indeed what you will usually find in a double-taxation agreement.

It may be a bit of a simplified view, but social security is something that comes with employment. If you are self-employed then you're usually off that game. So I would argue that if you are an employee of a company in C, then C's social security system is in charge of you. Which can cause funny side effects, like you might have an Irish health insurance but the doctor you want to see in Luxembourg might no be able to treat you on this basis. This is where the EU's common market isn't nearly what it should be, let alone if a non-EU (read: UK) context kicks in.

On the residence and work permit questions: You only name EU member countries, so there is no big issues around this usually. In other contexts, i.e. with non-EU countries like Switzerland, Ukraine, India, USA, ... this may be a lot different.

One should say that many of the rules around "am I allowed to work in this country" have been made in times where digital remote work wasn't a broad reality. In practice, today, it frequently comes down more to "who will ask me" or "who will care" a lot more than: What is the legal setup.

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  • (+1, nice overview) On tax residence and three-way splits, many countries have additional rules to determine tax residence. For exemple, if France is the country where you spent the most time in a year (even if that's less than six months), you could be deemed a tax resident, same thing if you own a home and your family lives there. But as you note at the end, the lower your footprint, the less likely you are to be bothered in practice. – Relaxed Jan 7 at 14:39

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