In summary…
Working in Luxembourg while living in France does not change the country that taxes your assets: it's still France. What Luxembourg does change is the tax on your salary, which is neutralized in France by the tax treaty, and your pension, which will be paid by at least two countries.
Our position: the cross-border worker must treat his assets as a French resident, and reserve his Luxembourg choices (pension contract, life insurance) to what he has checked on the French side before signing.
«I work in Luxembourg, and they’re talking to me about a pension plan and life insurance policy there: do I have to?» The question comes from an executive who lives in Thionville or the Moselle region, is taxed in Luxembourg on his salary, and is taxed in France for everything else. It conflates three subjects that the tax treaty clearly separates: salary, assets, and retirement.
1. The salary is taxed in Luxembourg, and neutralized in France.
Since 2024, a tax credit has replaced the exemption
The convention of March 20, 2018, replaced the 1958 convention. For salaries from Luxembourg sources, France grants a tax credit equal to the corresponding French tax, with "an effect equivalent to the exemption method," according to the Senate report. The ministerial response of April 2025 confirms that private salaries from Luxembourg sources remain taxable in Luxembourg and that the convention fully applies to income from 2024 onwards, following a grace period that maintained the old system for income earned between 2020 and 2023.
A practical consequence, which should be verified for your specific situation: a French tax deduction only reduces the tax on your French income, not the tax on a salary that has already been neutralized. Therefore, a contribution to a French retirement savings plan, deducted from income that is not taxed in France, does not generate any savings. See the PER deduction limit.
Teleworking: 34 days
The amendment of November 7, 2022, increases the teleworking threshold from 29 to 34 days per year; Law No. 2025-139 of February 17, 2025, authorizes its approval by France. According to the ministerial response to written question No. 2101 from the National Assembly, cross-border workers can telework 34 days instead of 29 and remain taxable in Luxembourg. A review clause stipulated a new examination of the conditions before the end of 2024; the effective date of the amendment and the outcome of this clause should be verified with the relevant authorities before planning your teleworking days.
Assimilation to residents: an option that can be calculated
For a married couple, being treated as a Luxembourg resident grants access to tax class 2 (joint taxation, with the income of both spouses). The Luxembourg Inland Revenue (ACD) requires that at least 90% of worldwide income be taxable in Luxembourg, or that the sum of net income not subject to Luxembourg tax be less than €13,000; this condition is assessed annually for each spouse or partner individually. The application is made in the "Assimilation of non-resident to resident" section on page 3 of form 100. See also tax classes and couples.
For the technician. Agreement of 20 March 2018 (in force since 19 August 2019), amendment of 10 October 2019 rewriting Article 22 (tax credit equal to French tax for employment income), amendment of 7 November 2022 on teleworking (Law No. 2025-139 of 17 February 2025). Equivalent to: Article 157ter of the Luxembourg Income Tax Law (LIR). See the France-Luxembourg convention.
2. Life insurance and assets: you remain a French resident
A Luxembourg contract is not a Luxembourg contract for you
Working in Luxembourg does not make you a Luxembourg tax resident or grant you any special status: your capital, rental income, and contracts are taxed in France, just like those of an employee in Lyon. A life insurance policy taken out with a Luxembourg insurer remains, for a French resident, a contract subject to French taxation: gains are taxed upon redemption, inheritance tax applies, and the foreign contract must be declared with your income tax return.
The question is therefore not "where is the contract?" but "what are the advantages of having it there?" There are reasons to choose a Luxembourg contract (protective framework for savers, choice of assets, dedicated fund); none of them depend on your employment. Our articles explain this in detail: the protection of savings, the free provision of services and the purchase by a French resident.
For the technician. Gains on redemption: Article 125-0 A of the French General Tax Code (CGI). Death benefits: Articles 990 I and 757 B of the French General Tax Code (see our article).
3. Retirement: two countries, two ages, two tax systems
Each country pays its share, at its age
You will have contributed in France and then in Luxembourg. The Luxembourg pension insurance pays a pension after one year of work there; for less than one year, your months in Luxembourg count elsewhere but do not accrue any pension rights in Luxembourg. Periods of European insurance are added together to determine eligibility; each country where you have at least one year of insurance pays its own pension, at the corresponding age. Luxembourg calculates a pension proportional to your length of service there. The old-age pension begins at age 65 with 120 months of insurance (total European periods); early retirement is possible at age 57 or 60. You apply for your pension through the institution in your country of residence, which then forwards your application.
The convention allocates the tax according to the nature of the pension.
Private pensions remain taxable in the country of residence, therefore in France. Pensions paid under social security legislation are taxed at source, therefore in Luxembourg for pension insurance benefits. Your retirement income will thus be taxed in two countries depending on the pension bracket. See pensions and non-residents.
The retirement savings contract: something to check before subscribing
Luxembourg offers a retirement savings plan with premiums that are tax-deductible up to €4,500 per year starting in 2026 (€3,200 from 2017 to 2025), with a minimum term of ten years. It is available to non-residents who have opted for tax assimilation. In Luxembourg, half of the annuity is tax-exempt, and the capital is taxed at half the overall rate. In France, the tax treatment of benefits upon retirement must be determined before subscribing: claiming tax deductions in Luxembourg without knowing the details is a complex undertaking that needs to be calculated, not signed.
For the technician. Old-age pension provision: Article 111bis of the Luxembourg Income Tax Law (LIR); in Luxembourg, half of the life annuity is exempt from tax, and the capital is taxed at half the overall rate (ACD, updated 27/01/2026). Coordination: Regulation (EC) No 883/2004 of 29 April 2004 coordinates the social security schemes of the Member States, particularly for individuals who have contributed in several countries.
4. Numerical case: the 90 mark %
Situation. A married couple residing in France. One spouse works in Luxembourg: €100,000 of taxable income in Luxembourg. This spouse is the sole owner of rental properties in France, which generate rental income. Assumptions: net taxable income, no other income for this spouse. This illustrative example is calculated using the rules in effect on October 23, 2026. The threshold is assessed for each spouse individually: only this spouse is tested here; the situation of the other spouse and the decision for the couple are verified with the French Tax Administration (ACD).
Issue. Assimilation, necessary for class 2, requires 90 % of worldwide income taxable in Luxembourg, or less than €13,000 of net income not subject to Luxembourg tax.
Strategy. Measure both criteria before completing the declaration, not after.
Result. With €15,000 of French rental income: worldwide income of this spouse €115,000, Luxembourg share €100,000 / €115,000 = 86.96 (%); income not subject to Luxembourg tax €15,000; neither criterion is met for this spouse. With €12,000: €100,000 / €112,000 = 89.29 (%), below the threshold of €90 (%), but the income not subject to Luxembourg tax (€12,000) falls below €13,000: the second criterion is met for this spouse. Three thousand euros of rent changes the result.
Frequently asked questions
Can a cross-border worker open a Luxembourg life insurance policy?
Yes, like any French resident. His cross-border worker status offers him neither advantages nor disadvantages: the contract is taxed according to French rules. Its value lies in the protection of savings and the accessibility of assets.
How much pension will I receive in retirement?
A pension is paid out in each country where you have at least one year of insurance coverage, at the retirement age in that country. A France-Luxembourg pension plan generally results in two pensions.
Do I have to declare my Luxembourg salary in France?
Yes, it appears in the French tax return, where it is offset by the tax credit provided for in the treaty. For the general framework, see living in Luxembourg.
Are you working in Luxembourg and being offered a contract or a retirement plan?
The initial meeting is to verify the French side of the contract before any signature. Forty-five minutes, with no obligation.
Are you a notary, chartered accountant, lawyer, or fellow consultant? And your cross-border clients are asking you about their assets? We work in a joint venture: the client remains yours.
Book an appointment
The initial consultation is to establish your exact situation and determine if there is anything that can be done—sometimes there is nothing, and we will say so as well. Thirty minutes, with no obligation.
Book an exchange with Balmont Conseil
Alexis Sagnier, financial and real estate investment advisor, insurance broker, AMF certified. ORIAS 13003497. Updated on 23/10/2026.
Official sources consulted
- Luxembourg Direct Tax Administration: Tax assimilation of non-resident taxpayers to resident taxpayers
- Direct Tax Administration: Old-Age Pensions
- Guichet.lu: Old-age pension for non-residents (including cross-border workers)
- Guichet.lu: old-age pension from age 65
- CLEISS: the Luxembourg social security system (employees)
- Senate: Legislative file for bill no. 255 (2023-2024), amendment to the France-Luxembourg convention
- Senate: report on the France-Luxembourg amendment (bill no. 255)
- Senate: Explanatory memorandum for the amendment of November 7, 2022
- National Assembly: report on the amendment of 10 October 2019 to the France-Luxembourg convention
- National Assembly: Written question no. 2101 and reply from the Minister (April 1, 2025)
- Government of Luxembourg: Approval of the amendment on teleworking
- Public Service: Taxation of life insurance (verified on 15/04/2026)
- EUR-Lex: Regulation (EC) No 883/2004 of 29 April 2004 on the coordination of social security systems
