Border: France-Belgium

Flows that provide structure

CIt is these differences and disparities between the territories that generate numerous cross-border flows (linked to cross-border employment, local tourism, and trade and purchases, etc. in the neighbouring country). There are also substantial cross-border flows in the social and educational sectors.

Flows of workers

After Switzerland, Luxembourg and Germany, Belgium is the country that hosts the largest number of cross-border workers from France, with a total of 33,200 persons according to INSEE’s figures (2015). This number has risen steadily, increasing by 56% between 1999 and 2011. In 2010 the number of  cross-border workers coming to Belgium slowed down and finally stabilised in 2011 and 2012. In some French border areas, for example in Longwy, 40% of the workers are cross-border workers. In the opposite direction, the number of cross-border workers living in Belgium and working in France is rising strongly from 5,900 to 7,000 between 2009 and 2013 according to Inami's figures. Today, 14,000 Belgian residents are working in France.

One of the specific features of the French-Belgian border is the relative socio-professional homogeneity of cross-border workers. Manual workers form the largest category and account for the great majority of cross-border flows (on average, they constitute 60% of worker flows across the border) with peaks observed close to Belgian Flanders linked to the fact that a command of Dutch is not required for the least-skilled jobs. Yet, since 2006, in the Walloon part of Belgium, the number of manual workers decreases and the number of office workers rises markedly.

Developments in the tax status of cross-border workers along the French-Belgian border

The original objective of the 1964 French-Belgian tax agreement was to avoid cases of double taxation. This agreement thus enabled – until recently – cross-border workers to be covered by the tax regime of their country of residence, which was an exemption from the general principle whereby wages in the private sector are taxable in the country in which the job is performed. As an exception (by virtue of the tax agreement), residents in the French border area who were employed in the Belgian border area paid their taxes in France. This is what is known as the “derogation regime for cross-border workers”.
To be eligible for the cross-border worker tax status and therefore to pay their taxes in France, workers had to:

• return home every day;
• be resident in the French border area, as defined for tax purposes, or in one of the districts listed within a 20 km strip along the border;
• work in the Belgian border area (with a maximum of 30 days outside of this area)

All in all, the advantages were clear for French nationals living in France and working in Belgium as they earned slightly higher wages for some jobs than in France and, above all, these wages were subject to significantly lower income tax than in Belgium. On average, French nationals working in Belgium receive a net salary that is 30% higher than that of their Belgian counterparts (based on an equivalent position and initial gross salary) because of this tax differential.

However, the amendment of 12 December 2008 provides for the phasing out of this border worker status. Since 2009, Belgian residents working in France have been taxed in France, with effect from 1 January 2007. French residents working in Belgium were eligible for the border worker regime up to 31 December 2011 and will continue to pay their taxes in France until 2033. As for new cross-border workers living in France and working in Belgium, they have paid their taxes in Belgium since the start of 2012. It is still too early to evaluate the impact that this change might have on cross-border flows.

Movements linked to consumer activity

Numerous local movements have long taken place across the French-Belgian border in both directions. There has always been a large number of cross-border transactions owing to the strong appeal of the goods available in the neighbouring country (hypermarkets for food shopping on the French side, DIY and gardening on the Belgian side linked notably to Sunday opening in Belgium). Around 45% of French people living in the border area regularly visit Belgian shops and 59% of Belgians in the border area go to French shops. This proportion is more or less evenly spread along the whole border. We may observe, however, that the proportion of Flemish people in the border area that go to France to shop is lower  (42%) than the average for Belgium. But in comparison, more Flemish people cross the border as tourists (20% of Flemish people compared with 11% of French people).

Exchanges in the social and education sectors

There are numerous cross-border flows in the education and social sectors, mainly from France to Belgium. While a fairly small number of Belgians go to university in France, French students account for 28% of the cross-border flows in this sector to Belgium. Attracted by courses in medicine and dentistry, there are 20,000 French students who study at Belgian universities, which has led the Belgian authorities to set a quota to limit this huge influx. Similarly, 8,000 French pupils go to school in Belgium. This unusual phenomenon can be explained by the existence in Belgium of a specialised school system for children with disabilities and other special needs and schools offering rare subject specialisation from secondary level onwards.