Government could take in €34 billion from tax on company profits next year, €6 billion more than originally predicted, Minister for Finance Paschal Donohoe confirmed on Friday.
The Minister was speaking after official figures showed Government spending of €90 billion slashed the State’s cash surplus by €3.6 billion at the end of September.
He said corporation tax, levied on company profits, could yield €34 billion in 2026 – €6 billion more than the €28 billion forecast earlier this year.
Mr Donohoe explained that Organisation for Economic Co-operation and Development (OECD) talks on a deal likely to hit the Republic’s tax take from multinationals based here have slowed down.
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“I do expect them to conclude and that will pose a challenge for us,” he cautioned.
[ Ministers in fraught negotiations over tightest budget in yearsOpens in new window ]
An OECD deal will clamp down on multinationals that channel profits from other countries through the State to cash in on low Irish corporate tax rates.
The Minister added that the Republic could begin to feel the impact of OECD changes on corporate taxes from 2027 on.
Exchequer returns, which detail Government revenue and spending, showed workers and businesses paid €73 billion in taxes in the nine months to the end of September.
The figures came as the Government put the final touches on Budget 2026, which it is due to outline next Tuesday, October 7th.
Mr Donohoe hinted at measures to aid business, and a VAT cut for hotels and restaurants is widely expected, but he said income tax would remain unchanged.
“Non-tax” income reached €18.2 billion, bringing the total collected by Government over the first nine months of the year to €91.2 billion.
Total Government spending rose by €11.7 billion to €89.8 billion by the end of last month, leaving the State with a surplus of €1.4 billion, against €5 billion at the same point last year.
A transfer of €6.1 billion to the Future Ireland Fund, and the Infrastructure, Climate and Nature Fund, accounted for more than half the increase in spending over the nine-month period.
The Oireachtas established both funds to deal with likely future demands on State finances, including spending on infrastructure, climate action and pensions.
Mr Donohoe said the Government would earmark a further €6.5 billion for those funds next year, bringing their combined total to €24 billion by the end of 2026.
[ Donohoe warns of tax vulnerability after steep drop in August receiptsOpens in new window ]
Spending by Government departments including health, education and public services rose by €5.4 billion to €77.5 billion.
“Non-voted” expenditure, which covers all other Government spending and includes the transfer to the two State funds, rose €6.3 billion to €12.3 billion, the returns show.
Corporation tax reached €20 billion by the end of September – €2.2 billion more than during the first nine months of 2024.
Corporation tax includes a €1.72 billion payment from tech giant Apple, which was last year ordered by the Court of Justice of the European Union to pay the State €13 billion in back taxes.
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The State collected €25.8 billion in income tax from workers over the nine-month period, an increase of €1 billion on the same nine months last year.
Shoppers paid €18.8 billion in VAT over the first nine months of this year – €900 million more than in the comparable period in 2024.
Government collected €3.6 billion in VAT in September, one of the six months of the year during which the tax must be paid.
Drivers, drinkers and smokers paid €4.8 billion in excise in the period to the end of last month, according to the figures.
