By the end of September 2026, Luxembourg’s state revenue saw a significant increase, reaching €23.9 billion. This marks a 9.9% rise compared to the same period in the previous year, primarily driven by robust tax collections. Notably, corporate income tax revenue surged to €3.3 billion, reflecting a 21.4% increase, while the solidarity tax revenue rose by 9.1% to €610 million. Additionally, the newly implemented national Pillar 2 tax contributed €239 million to the state’s coffers.
Other revenue streams also experienced growth. Value Added Tax (VAT) receipts increased by 7.8%, bringing in €4.7 billion, and subscription tax revenue saw a 10.5% rise to €1.1 billion. However, not all areas showed growth, as customs and excise revenue declined by 3.1%, totaling €1.8 billion.
Despite this revenue growth, Luxembourg’s state expenditure outpaced income, amounting to €24.2 billion by the end of the third quarter—an 8.9% increase from the previous year. The rise in spending was largely driven by higher allocations to social security, municipalities, and the European Union budget, alongside increased public investment and employee remuneration.
The disparity between revenue and expenditure resulted in a budget deficit of €339 million as of September 30, 2026. While the state’s financial inflows have seen substantial growth, the ongoing increase in government spending has led to this shortfall, highlighting the challenges of balancing income and expenditure in the current fiscal environment.