Luxembourg’s state revenue has surged by 9.9% in the first nine months of 2026, reaching €23.9 billion, according to recent financial data. This increase, amounting to an additional €2.2 billion compared to the same period last year, has been primarily driven by higher tax collections. Corporate income tax revenue saw a significant rise, up 21.4% to €3.3 billion, while revenue from the solidarity tax increased by 9.1% to €610 million. Additionally, the newly implemented national Pillar 2 tax contributed €239 million to the state’s coffers.
Value-added tax (VAT) collections also experienced an uptick, climbing 7.8% to €4.7 billion. Meanwhile, subscription tax revenue grew by 10.5%, reaching €1.1 billion. However, not all revenue streams saw growth; customs and excise revenue fell by 3.1%, totaling €1.8 billion.
Despite the robust growth in revenue, Luxembourg’s state expenditure outpaced income, resulting in a budget deficit of €339 million by the end of September 2026. The total expenditure rose to €24.2 billion, an increase of 8.9% or €1.98 billion from the previous year. The rise in spending was mainly attributed to higher transfers to social security, municipalities, and the European Union budget, as well as increased public investment and employee remuneration.
This financial snapshot reveals a complex economic situation where, despite strong revenue gains, the government’s spending needs continue to exceed its income. The deficit highlights ongoing fiscal challenges as Luxembourg navigates increasing demands on its budget.