Cross-border workers: tax transfers and projects funded by Luxembourg

Gilles Roth favours concrete projects, while Franz Fayot wants to discuss the instrument. The Franco-Luxembourg debate is about sharing revenue, but also about deciding how to spend it.

The debate over taxes paid by cross-border workers pits two ways of funding needs linked to cross-border employment against each other. Luxembourg Finance Minister Gilles Roth rejects a tax transfer, which he likens to a “blank cheque”, but supports Luxembourg contributing to concrete projects. The difference concerns not only where the money goes, but also who decides how it is used.

At a conference organised by the Fondation Bassin Minier on 10 November 2026 at the Chamber of Commerce, Roth acknowledged the importance of cross-border workers to Luxembourg’s economy. He rejected transferring part of the revenue without a specific allocation. LSAP MP Franz Fayot said he supported a contribution, whether in the form of a tax transfer or a cross-border fund. France’s ambassador to Luxembourg, Christophe Bouchard, welcomed the continuation of dialogue, without announcing an agreement.

Two mechanisms, two choices about money

A tax transfer involves moving part of the tax revenue collected in one country to another, under agreed arrangements. In the Franco-Luxembourg debate, the idea is that the country where a cross-border worker is employed returns a share of the revenue associated with their work to the country where they live, or to its local authorities. The rate, the revenue concerned and the beneficiaries would depend on an agreement: this is not an automatic refund paid to the worker.

Project funding works differently. The two countries can contribute to identified infrastructure or services, with a defined amount and purpose. The money is then tied to a specific expenditure, rather than to a general share of tax revenue. A cross-border fund could have its own rules: its name alone does not make it equivalent to a tax transfer or a line of co-funding for works.

The positions expressed in the debate reveal this choice about how to allocate funds. Roth favours targeted contributions and rejects a transfer he considers insufficiently regulated. Fayot believes a contribution is necessary and that the instrument can be discussed. Their disagreement is therefore not simply about whether to cooperate, but about the form of the contribution, how it is overseen and which needs it should cover.

Funding already earmarked for transport

Franco-Luxembourg cooperation already has a financial framework dedicated to mobility. In their joint statement in January 2025, Luxembourg’s Ministry of Mobility and the Grand Est Region presented a package of €230 million allocated by Luxembourg to projects in France: €220 million for rail and €10 million for roads. The funding for the projects concerned is to be shared equally between the two countries. The corresponding bilateral package therefore totals €460 million, half of which is from Luxembourg.

These amounts correspond to the projects’ funding framework. The €230 million represents Luxembourg’s share; the €460 million already includes both this contribution and the French share. The 50-50 split applies to the projects concerned, while their implementation is spread over several years.

The projects illustrate the logic of this earmarked funding. The 2018 cooperation protocol and its 2021 amendment support, in particular, improvements to the Metz–Thionville–Luxembourg rail line. Luxembourg’s contribution also funds road projects planned under the partnership. The Grand Est Region and French government departments are involved in implementation on the French side, while the Regional Directorate for the Environment, Planning and Housing (DREAL) coordinates the transport working groups as part of this cooperation.

DREAL says that in 2026 the first phase of the rail project is taking the form of a gradual introduction of longer trains, following the extension of platforms. Further progress depends on additional studies and works. These projects respond to concrete pressure on travel in northern Lorraine, linked in particular to the rise in cross-border employment. They show how a funding decision can target a specific transport capacity without covering all public spending in the areas concerned.

What project funding resolves, and what it leaves open

For cross-border workers, the distinction is apparent in the nature of the spending funded. A higher-capacity railway line or road improvement can make travel easier along a particular route. A tax transfer, if an agreement set out its terms, would give the other country or its local authorities a share of revenue that could be used differently. In both cases, the practical effect would depend on the sums involved, the projects selected and the timetables.

Mobility is an identifiable shared need; local authority budgets cover a wider range. Choosing an instrument therefore raises two related questions: who decides how the money is used, and which needs do the partners want to fund together? This is where the debate goes beyond the amount of any potential transfer.

The conference did not announce a new tax agreement. Bouchard noted that disagreements could coexist with discussions between the French and Luxembourg sides. For people living on both sides of the border, the next development to watch is therefore less a political formula than a concrete decision: whether or not to open negotiations on a tax transfer, a fund or other cooperation projects, and the rules that would determine who benefits.