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Corporation Tax

IFAC: One-third of corporation tax income from past five years came from just three companies

That’s according to a new report by the Irish Fiscal Advisory Council.

JUST THREE CORPORATE groups accounted for about one-third of Ireland’s corporation tax revenues each year for five years, according to a new report by the Irish Fiscal Advisory Council (IFAC). 

The finding is contained in a new report examining who pays Ireland’s corporation tax revenues, which draws on publicly available financial statements and relies on estimates where data is not available. 

IFAC said that it is generally well-known that Ireland’s corporation tax receipts are highly concentrated among a small number of large, foreign-owned multinationals. 

Revenue data for 2022 shows that 60% of corporate tax receipts are paid by just ten corporate groups. 

But the IFAC paper shines light on how how concentrated those 60% of receipts are. 

The estimates suggest that the same three corporate groups accounted for 34% of all of Ireland’s corporation tax revenues in 2021. This share ranged from between 30% and 38% during the five-year period of 2017 to 2021. 

This amounted to around €5.2 billion in 2021 (the latest year for which data is available). These payments equated to 8% of total tax revenues in 2021, up from 5% in 2017. 

IFAC has estimated this figure will be higher for 2022 based on provisional results. 

In terms of the largest players, the IFAC said Ireland’s concentration of corporation tax receipts predominantly relates to the ICT and pharma-chem sectors. 

The ICT and pharma-chem sectors accounted for over 90% of all corporation tax paid by the top ten taxpayers in 2021, IFAC said.

The names of these companies are anonymised, with IFAC citing “difficulties in identifying Ireland’s leading corporation taxpayers and the challenges associated with accurately estimating the corporation tax paid by each group”. 

In the report’s conclusion, the IFAC said the “growing concentration of receipts suggests a more granular approach is warranted to better understand who the leading corporation taxpayers in Ireland are and estimate how much they pay”. 

It also said: “Given this level of concentration, one-off firm- or sector-specific shocks are likely to be some of the most important drivers of fluctuations in the volume of corporation tax receipts. 

“Therefore, to better understand the origins of Ireland’s corporation tax revenue boom, policymakers should not focus exclusively on economy-wide indicators, but also on the specific activities, performance, and group structures of the largest taxpayers.” 

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