Ireland's Corporate Tax Revenue Highly Concentrated in Three Multinationals, Fiscal Watchdog Reports

Irish Fiscal Advisory Council Highlights Corporate Tax Concentration

Ireland's public finances are increasingly reliant on a concentrated base of corporate taxpayers, with three multinational companies accounting for a substantial 46% of the country's corporate tax receipts in 2024. This finding was reported by the Irish Fiscal Advisory Council (IFAC), the state's independent fiscal watchdog, which underscored the significant exposure of Ireland's economy to the fortunes of a limited number of firms. The total contribution from these three companies is estimated to be around €13 billion of the €28.1 billion collected in corporate tax for the year.

Growing Reliance and Associated Risks

While IFAC did not officially name the companies, reports widely suggest that Apple, Microsoft, and Eli Lilly are the three entities in question. Two of these, identified as tech giants, are estimated to have paid approximately €11 billion in corporate tax in Ireland in 2024, representing almost 40% of the total receipts. This concentration has intensified over time; previous research indicated that the top three companies contributed about a third of all corporate tax receipts between 2017 and 2021. The top ten highest-paying corporate groups collectively accounted for almost 60% of total corporation tax receipts in 2024.

IFAC has consistently warned that such a high level of concentration makes Ireland's tax revenues 'exceptionally concentrated' and 'more risky,' as they become heavily exposed to the performance and decisions of specific companies. Brian Cronin, an economist at IFAC, noted that 'future receipts could be much higher or lower than current levels' due to this uncertainty.

Future Outlook and Policy Implications

The council's report emphasizes that the doubling of overall corporation tax receipts between 2021 and 2024 was largely driven by increased payments from these top three payers. Looking ahead, the introduction of a 15% minimum effective tax rate for large corporations, expected from 2026, is anticipated to further increase corporate tax receipts. However, IFAC suggests that this change could also lead to Ireland becoming 'even more reliant' on a small number of very large US-owned multinationals.

The government has been advised to save a larger portion of these revenues, treating them as a 'high-risk, finite resource,' similar to how Norway manages its oil wealth. This strategy aims to mitigate the potential impact of sudden fluctuations in corporate tax income, which could arise from shifts in global economic conditions, changes in company strategies, or international tax policy reforms.