The extraordinary flood of corporate tax into the exchequer shows no sign of abating. Not yet, anyway. The record receipts of €10 billion in November, the key month for payments, provides a boost for the exchequer and means there will be a significant budget surplus again this year. The Department of Finance expects further growth in this tax heading next year, as the new 15 per cent rate that applies to the profits of the biggest companies kicks in.
Ireland has had an extraordinary run in terms of corporate tax payments – and it may not be over yet. But the concern is that the exchequer is becoming ever more reliant on this one source of revenue. Corporation tax payments have grown by 14.9 per cent so far this year compared to the same period in 2024 – excluding the once-off Apple payment last year – while income tax and VAT have grown by 4.6 per cent and 5 per cent respectively.
The corporate tax surge in November is no great surprise, as the initial payments made by many of the biggest companies in June were also strong. Despite Donald Trump’s tariff policies, trade between the US and Ireland has not been greatly disrupted and there have been no major changes in American tax policy.
There is no doubt, however, that unpredictable US policy shifts remain a threat to Ireland. The US president is intent on encouraging big tech and pharma companies to invest more at home and pay more tax there. Ireland’s latest tax surge will be noted in the White House.
READ MORE
A paper on Ireland’s fiscal vulnerability was also published yesterday by the Department of Finance. It showed that the top 10 companies pay 57 per cent of tax under this heading, while 10 per cent of those paying income tax account for 40 per cent of revenue in this area. A lot of the highest earning taxpayers also work for the big multinationals, or companies reliant on them. A medium-term framework on the public finances, to be published, shortly needs to put this in the context of national spending plans and spell out the implications for policy.
