Luxembourg’s central-government revenue rose by €1.34bn in the first half of 2026, while expenditure increased by €1.33bn, leaving a €104m deficit, Finance Minister Gilles Roth told MPs on 13 July. The ministry later confirmed that the €104m deficit should be compared with the €16.18bn revenue figure and the corresponding €16.28bn expenditure total.
The deficit was €7m smaller than a year earlier. Under the national-accounts measure used for the balance, revenue increased by 9% to €16.18bn and expenditure by 8.9% to €16.28bn.
“Our public finances are solid,” Roth said after presenting the figures to parliament’s finance and budget-execution committees. “Despite this favourable situation, we must remain cautious and closely monitor global uncertainties.”
Tax receipts rise
Under the separate cash-based state accounts, total receipts increased by €1.39bn, or 10.8%, to €14.31bn. That represented 53% of the revenue forecast in the 2026 budget, compared with 49.6% collected by the same point last year.
The finance ministry later clarified that the €14.31bn figure mainly covered revenue received under budget accounting. The €16.18bn figure used for the central-government balance covered a wider group of public bodies under accrual-based national-accounts rules, including special funds, separately managed government services and public institutions.
Luxembourg’s direct tax administration collected €8.02bn, €507.5m more than in the first half of 2025. Corporate income-tax receipts rose by €203.7m to €2.22bn, while tax deducted from salaries increased by €195.7m to €3.55bn.
The registration and VAT administration collected €4.53bn, an increase of €841m. VAT receipts rose by €317.2m to €3.07bn, while subscription-tax receipts from investment funds increased by €51.4m to €721.1m.
The largest movement came from inheritance tax. Receipts reached €493.1m, compared with €57.8m a year earlier, a rise of €435.3m.
The finance ministry subsequently told Paperjam that the €435.3m increase was exceptional and resulted from a single estate. The rise accounted for more than half of the €841m increase in revenue collected by the registration and VAT administration and almost a third of the €1.39bn increase in total government cash receipts.
“Our economy is resilient, particularly the financial sector,” Roth said. Customs and excise receipts were almost unchanged at €1.16bn, with higher petrol and road-diesel duties offset by lower tobacco and alcohol receipts.
Spending keeps pace
Central-government expenditure rose by €1.33bn to €16.28bn. Direct public investment increased by €251m to €1.37bn, while capital transfers rose by €190m to €885m.
Together, those increases accounted for €441m of the rise in spending. Transfers to social security increased by €247m, including a €138m rise in pension-insurance funding, while transfers to local authorities grew by €49m.
Staff costs rose by €243m to €3.8bn and intermediate consumption by €157m to €1.16bn. Interest due on public debt increased by €39m to €199m, while Luxembourg’s contribution to the European Union based on gross national income rose by €134m to €279m.
The cash picture
On a separate cash basis, total budget receipts stood at €14.33bn and expenditure at €17.56bn at the end of June, producing a deficit of €3.23bn. The full-year budget provides for a deficit of €3.06bn, and the ministry did not publish a revised year-end forecast.
The current budget recorded a €375m deficit, while the capital budget showed a shortfall of €2.86bn. Capital expenditure reached €3.37bn, or 78.6% of the amount allocated for the full year.
Public debt stood at €26.5bn at the end of June, equivalent to 28.3% of gross domestic product.
“We must continue to manage the public finances responsibly,” Roth said.
Update, 15 July 2026: This article was updated after the Finance Ministry identified the source of the inheritance-tax increase and clarified the accounting basis of its revenue figures.
