Luxembourg’s state revenue saw a significant rise of 9.9% by the end of September 2026, reaching €23.9 billion, despite the country recording a budget deficit of €339 million. This increase in revenue, amounting to €2.2 billion compared to the same period last year, was largely driven by higher tax collections.
Corporate income tax revenue was a major contributor to this growth, with collections reaching €3.3 billion, up €582 million or 21.4% year-on-year. The solidarity tax also saw an increase, rising by 9.1% to €610 million. Additionally, the newly implemented national Pillar 2 tax brought in €239 million.
Value-added tax (VAT) and other revenues also contributed to the overall increase. VAT receipts climbed by 7.8% to €4.7 billion, while subscription tax revenue increased by 10.5% to €1.1 billion. However, not all revenue streams saw growth; customs and excise revenue experienced a decline of 3.1%, dropping to €1.8 billion.
On the expenditure side, the state recorded €24.2 billion by the end of the third quarter, marking an 8.9% increase from the previous year. This rise was mainly attributed to higher transfers to social security, municipalities, and the European Union budget, as well as increased public investment and employee remuneration.
Despite the robust growth in revenue, Luxembourg’s central government faced a budget deficit, as spending continued to outpace income, leading to a shortfall of €339 million as of September 30, 2026.