Luxembourg’s financial landscape in 2026 has seen a notable shift, with state revenue reaching €23.9 billion by the end of September, marking a 9.9% increase compared to the previous year. This rise, amounting to an additional €2.2 billion, was largely driven by higher tax collections. Corporate income tax, in particular, surged to €3.3 billion, up €582 million or 21.4% from the same period last year. Revenue from the solidarity tax climbed 9.1% to €610 million, and the newly implemented national Pillar 2 tax contributed €239 million to the coffers.
Value-added tax (VAT) and other revenue streams also saw growth. VAT receipts increased by 7.8% to €4.7 billion, while subscription tax revenue rose by 10.5%, reaching €1.1 billion. However, not all revenue streams were positive; customs and excise revenue decreased by 3.1% to €1.8 billion.
Despite the robust growth in state revenue, Luxembourg’s state expenditure also rose significantly. By the end of the third quarter, spending had reached €24.2 billion, an increase of €1.98 billion or 8.9% compared to the same period last year. The primary drivers of this increased expenditure were higher transfers to social security, municipalities, and the European Union budget, along with greater investment in public infrastructure and employee remuneration.
As a result of these financial dynamics, Luxembourg recorded a budget deficit of €339 million as of September 30, 2026. This deficit underscores the ongoing challenge of balancing revenue growth with rising expenditures, even amidst a favorable tax revenue environment.