Luxembourg’s state revenue surged by 9.9% to reach €23.9 billion by the end of September 2026, driven largely by increased tax collections. The corporate income tax alone rose significantly, with revenue hitting €3.3 billion, marking a 21.4% increase from the previous year. Additionally, the newly introduced national Pillar 2 tax contributed €239 million, while the solidarity tax revenue grew by 9.1% to €610 million. VAT receipts also saw a boost, climbing 7.8% to €4.7 billion, and subscription tax revenue increased by 10.5% to €1.1 billion.
Despite the substantial growth in revenue, Luxembourg’s state expenditure outpaced income, leading to a budget deficit of €339 million as of September 30, 2026. State expenditure rose by €1.98 billion, or 8.9%, reaching €24.2 billion by the end of the third quarter. This increase in spending was primarily attributed to higher transfers to social security, contributions to the European Union budget, along with increased investment in public infrastructure and employee remuneration.
While most revenue streams experienced growth, customs and excise revenue saw a decline, dropping by 3.1% to €1.8 billion. This decline was among the few setbacks in an otherwise strong fiscal performance.
The financial dynamics highlighted in Luxembourg’s latest figures underscore the challenges of balancing increased revenue with rising expenditures. As the country navigates its fiscal strategy, the current deficit presents a critical area for policymakers to address, ensuring that future budgetary planning aligns revenue growth with sustainable spending practices.