MercoPress. South Atlantic News Agency

Three companies accounted for a third of all corporation tax in Ireland

Dublin is reaping corporation tax bonanza as reforms to global rules mean major US companies are choosing to pay tax on their international profits in Ireland

Three companies accounted for a third of all corporation tax collected in the Republic of Ireland between 2017 and 2021, new research suggests. The Irish Fiscal Advisory Council (IFAC) said that amounted to some US$ 6,5billion in 2021 alone and probably increased last year. Corporation tax is the tax that companies pay on their profits.

Ireland has been reaping corporation tax bonanza as reforms to global rules mean major US companies are choosing to pay tax on their international profits in the country.

IT and pharmaceutical companies accounted for the vast majority of the corporation tax paid in Ireland in 2021. The best known of those is Apple, which has said it is Ireland’s largest taxpayer.

Last year Ireland raised €22.6bn (£20bn) in corporation tax, 182% more than the €8bn (£7.08bn) it took in just five years ago.

The corporation tax revenues are so large they are enabling the Irish government to run a budget surplus. The government has acknowledged that that is likely to be an unsustainable windfall and is planning to use additional revenue to establish a foreign wealth fund.

The IFAC study is based on publicly available information such as filings to Ireland’s Companies Registration Office.

It found that the top three firms accounted for 34% of all corporation tax revenues in 2021. That share ranged from between 30% and 38% during the five-year period, from 2017 to 2021.

The identities of those three groups did not change across the period. The study also found that the IT and pharmaceutical sectors are estimated to account for over 90% of the corporation tax paid by the top 10 firms in 2021.

Responding to the study, Irish Finance Minister Michael McGrath tweeted: “This level of concentration is a clear risk to our finances that cannot be ignored. ”This is why I’m developing proposals for a long-term savings fund to make our finances safer & more sustainable.”