An analysis by the Tax and Customs Administration of corporate income tax returns last year shows that the share paid by only ten multinationals has risen to 57%.
Last year, the amount of corporate tax collected by the State increased by 48% to €22.7 billion. This year it is expected to rise again to more than €24 billion.
Last year, the ten largest multinationals in Ireland paid much more tax on their profits.
It was believed that the ten largest companies paid just over half of all corporate taxes. Today’s figures show that the concentration of tax paid by the top ten has increased to 57%.
Corporate income tax has nearly doubled since 2020 and represents 27.5% of all taxes paid. It has largely replaced VAT as the second largest source of tax.
The revenue analysis shows that corporate tax paid has increased in almost all sectors of the economy. However, there was a marked increase in production.
The amount paid by this sector, which includes chemicals, pharmaceuticals and ICT manufacturing, rose by 128% to just over €10 billion and accounts for 77% of the total increase in corporate tax paid in 2022.
Foreign owned multinationals accounted for €19.6 billion or 86.5% of all corporate tax paid.
Irish multinationals paid €928 million or 4.1%, while non-multinationals paid €2.1 billion or 9.4%.
This was based on a 29.65% increase in trading profits in 2022 among companies across all industries.
The ten largest corporate taxpayers paid just over €13 billion last year.
According to Revenue, that same group of ten companies paid €7.8 billion in 2021 and five years ago, in 2018, they paid just over €4 billion. In other words, the corporate tax they paid has more than tripled in five years.
Last year, 77,136 companies paid corporation tax.
63,647 paid between €1 and €40,000. There were 171 companies that paid more than 10 million euros.
Based on 2021 data, the Income found that there were 159 foreign multinationals with corporate tax liabilities in excess of €8 million.
These companies employed 111,546 people.
The wage bill amounted to just over €7.4 billion, which equated to an average annual salary of just over €66,000.
They paid $1.85 billion in income taxes, $362 million in USC, and $981 million in combined employer and employee PRSI contributions.
They also paid just over 1 billion euros in VAT.
Speaking to the Oireachtas Budgetary Oversight Committee tonight, the finance minister said a scoping document would be published in the coming weeks outlining the government’s thinking regarding a long-term windfall savings vehicle.
Michael McGrath said the figures released today by the IRS highlight not only the growth in corporate tax revenues, but also the concentration of where they come from.
He said there would be a serious risk to public finances if the government used what could be temporary revenues to commit permanent expenditures.
“So we’re not going to do that,” he said.
“We’re not saying these receipts will disappear overnight. But there’s definitely a risk.”
He added that growth will be flat around 2024 and 2025, when the impact of the OECD BEPS tax changes will materialize.
“But all of that underscores to me the importance of being careful, being careful with these receipts,” he said.
“We believe they won’t last forever.”
He said the exact relationship between the existing Rainy Day fund and the new fund needs to be worked out and an option is to merge the existing into the new.
Mr McGrath also told the committee that the economic backdrop would determine next year’s budget.
“Where will we be in the fall in terms of inflation, what will be the situation with the war in Ukraine, where are we on energy prices, where are we on monetary policy, the impact that has , the cost of living pressure in general for households, for businesses?” he asked.
– additional reporting Will Goodbody
