Luxembourg's budget revenues did not cover the deficit
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Luxembourg Finance Minister Gilles Roth presented on 21 July the country's financial situation at the end of the first half of 2025. According to the SEC2010 European accounting standards, central administration revenues totalled €14.8bn, an increase of 2.5% (or €367m) compared to the same period last year. However, expenditure reached €14.9bn, resulting in a deficit of €111m.
The biggest contributor to the growth in revenues was the Administration des contributions directes (Administration des contributions directes), which collected €7.5bn - an increase of 3.1% year-on-year. Of particular note was corporate income tax, which increased by an impressive 14.8% (+260.3 million euros), signalling the good state of the corporate sector and its tax base.
Meanwhile, payroll tax revenues remained nearly flat, and taxation on returns even declined due to a less intensive tax charge compared to 2024.
The Administration de l'enregistrement, des domaines et de la TVA (Administration de l'enregistrement, des domaines et de la TVA) recorded a €42.2 million (-1.1%) decline in revenues. Despite a €37.6 million increase in capital gains tax, the fall in revenues from property registration (-35.3%) and VAT (-0.8%) outweighed the positive trend.
It is worth noting that the decrease in registration revenues is due to the government's targeted policy of facilitating access to housing for the population. As for VAT, the decrease is due to refunds caused by exceptional adjustments at the year-end.
Public expenditure increased by EUR 965 million or 6.9 per cent compared to the first half of 2024. The largest expenditures were in the education, social protection and public investment sectors, both direct and indirect.
The balance of the central administration at the end of June was -111 million euros. Nevertheless, Minister Roth maintains a moderately optimistic tone: "We are staying the course. Finances remain stable despite the uncertainty. The Luxembourg economy and the financial sector are feeling confident. We continue to actively invest in the future, in our children and in social cohesion," the Minister emphasised.
Despite the deficit, current indicators point to the state's healthy financial structure and ability to sustain moderate fiscal imbalances without threatening fiscal stability.
