IRELAND’S CORPORATE TAX rate is a frequent source of political debates, particularly when it comes to claims about how high our rate should be.
The Government plans to raise the country’s corporate tax rate for large companies from 12.5% up to 15%, in line with a minimum global rate implemented by the Organisation for Economic Cooperation and Development (OECD).
The country’s rate of corporate tax collection is back in the news this week after the publication of the Government’s Stability Programme Update showed that a massive tax surplus is expected this year, largely on foot of receipts from large multinationals.
Last week, the Taoiseach claimed that the State’s corporate tax income per person is among the highest in the European Union. But is this true?
Leo Varadkar said last week that Ireland collects more corporate tax per person than most other EU countries.
“We take in more money per head, in corporate profit tax, than almost any country in the European Union – about €5,000 per head,” he said on RTÉ Radio 1′s This Week programme.
“There was a time when people criticised us for not taxing these companies enough. Now we get a huge amount of tax coming in from these companies. And yes, it is a vulnerability,” Varadkar noted, before discussing how this revenue is allocated.
So, does Ireland take in about €5,000 per person in corporation taxes? And is this more than most countries in the EU?
The most recent full year we have tax figures for is 2022, when it was announced that “corporation tax receipts amounted to €22.6 billion”.
The Central Statistics Office (CSO) also released a preliminary population count of Ireland for 2022, estimating that a little more than 5.1 million people lived in Ireland.
Dividing that €22.6 billion by 5.1 million people gives about €4,431 per person in corporation tax last year. This is not quite the “€5,000 per head” that Varadkar claimed – though one could argue that it is near the figure, as the Taoiseach suggested.
Varadkar likely also took into account the figures from the first three months of 2023, which showed an increase of 71% in corporate tax receipts during the first three months of 2023 – figures which were released before his interview last week.
That amounted to an extra €1.3 billion in corporate tax takings compared to the first three months of 2022 – equivalent to an additional €254 per person.
If the figures from April 2022 to March 2023 are totted up, the corporate tax take per person rises to €4,685 – closer to €5,000 per person, though still not quite there.
It is possible that tax receipts could continue to rise for the final three quarters of 2023. If this happens – and it is only an if – corporate tax takes could reach or even exceed €5,000 per capita for 2023.
So how does this stack up against other EU countries?
The methods and characterisation of tax collection varies between countries and can take time to be standardised.
Inquiries to the European Commission and to Eurostat, the organisation responsible for providing statistical information to EU, both pointed to figures collated from 2021 – the most recent full year for which figures are available.
One of the data sets The Journal was directed to also showed the proportions that corporation tax made up of a country’s total taxation, and included a ranking (downloadable here).
In 2021, Ireland had the second-highest proportion of its total taxes take coming from corporations in the EU, at 17.2%. Only Cyprus was higher.
Using the total revenue from corporations taken from this set, as well as population figures from Eurostat, we are able to see how much money European countries make through corporation tax per capita.
(Note that these figures are standardised. So, for example, the Irish figure includes taxes on corporation holding gains, which the CSO does not appear to count as corporation tax. However, this should not be significant enough to affect the final outcomes. Detailed breakdowns of each country’s taxation take can be downloaded here).
The Journal’s calculations using these figures can be viewed here, however the conclusion of these calculations is simple.
In 2021, Ireland’s corporate tax rate per person was second only to Luxembourg in the EU.
The third-highest ranked country was Denmark. However there are significant jumps in the amounts collected per person between these three countries.
The UK had left the EU the previous year and so was not included in this dataset.
As that country’s data may have been collated or calculated differently, it would be hard to give them an accurate ranking. Fluctuating exchange rates between the Pound and the Euro would further push and pull them through the ranks.
However if their reported 2021 receipts can be taken at face value, they would have collected significantly less from corporate tax per capita than Ireland — there is no recent exchange rate that would have them outrank Ireland.
Norway, which is not in the EU, but is in the European Economic Area, would have taken Ireland’s spot if it was included in the rankings.
The Taoiseach claimed that Ireland takes in more money in corporate tax than almost any other country in the European Union.
Leo Varadkar said that Ireland takes in “about” €5,000 per person in corporation tax, with Government data showing that €22.6 billion – equivalent to €4,431 per person – was gathered last year.
According to figures supplied by Eurostat, Ireland collected the second-highest level of corporation tax per capita in 2021 – the most recent year for which complete data is available across European countries.
Therefore, we rate the Taoiseach’s claim as TRUE. As per our verdict guide, this means that the claim is accurate, and is not missing any significant details or context.
The Journal’s FactCheck is a signatory to the International Fact-Checking Network’s Code of Principles. You can read it here. For information on how FactCheck works, what the verdicts mean, and how you can take part, check out our Reader’s Guide here. You can read about the team of editors and reporters who work on the factchecks here.
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