Luxembourg State Revenues Rise Despite €1bn Deficit in 2025

On Tuesday 3 February 2026, Luxembourg's Minister of Finance, Gilles Roth, presented the State's financial situation as of 31 December 2025 to members of the finance and budget execution committees of the Chamber of Deputies (Luxembourg's parliament).

As of 31 December 2025, central government revenues amounted to €29.1 billion, according to the ESA 2010 European accounting rules. According to the Ministry of Finance, this represents continued strong growth of €705 million (+2.5%), compared to 31 December 2024. This follows a record year in 2024: growth of €3 billion or 11.5%.

Luxembourg Inland Revenue (ACD) collected €14.4 billion in revenue, a decrease of €70.3 million (-0.5%) compared to the same period last year. However, there were substantial increases in corporate income tax (+€260.4 million or +7.8%), driven primarily by the financial sector, and in withholding tax on salaries and wages (+€108.8 million or +1.7%). The most significant decreases were in tax on income from capital - due to more volatile revenues (-€252.7 million or -23.8%) - and wealth tax (-€117.1 million or -10.6%), reflecting outperformance in 2024. A revenue shortfall was also recorded in personal income tax (assessed tax) (-€83.9 million or -6.2%).

The Registration Duties, Estates and VAT Authority (AED) reported total revenues of €7.9 billion, an increase of €77.5 million or 1.0% compared to 31 December 2024. This positive trend was driven by VAT receipts (€57.9 million or 1.0%) and subscription tax receipts (€73.9 million or 5.7%). Registration fees, however, saw a decrease of €30.5 million or 16.3% compared to the same period in 2024.

At the Customs and Excise Agency (ADA), revenues amounted to €2.6 billion, representing an increase of €294.1 million (+12.8%).

On the expenditure side, central government spending amounted to €30.1 billion as of 31 December 2025, according to the ESA 2010, representing an increase of €2.1 billion (+7.4%) year-on-year.

This increase is explained, among other things, by higher public investments of €780 million (23.8%), including in affordable housing (€230 million), military equipment (€251 million), and energy and climate policy (€95 million), employee compensation (€620 million or 9.0%), as well as other current transfers, for example to social security and municipalities (€527 million or 4.6%).

The central government's deficit stood at -€1 billion as of 31 December 2025, although the final balance will only be known after the supplementary period extending until the end of February 2026.

Minister Roth commented: "Despite less dynamic revenue growth in 2025 than in 2024, our public finances remain sound. Our public debt is the second lowest in the eurozone and we recently reaffirmed our AAA rating. We continue to invest in the country's future, social cohesion, economic growth and our common security. Without this additional spending, our deficit would be smaller. Therefore, I remain cautiously optimistic for the coming years."