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According to a recent report by the Department of Finance, the high amount of tax revenue from corporation tax is “a significant risk to the public finances.”

A decade ago, corporation tax accounted for 12 per cent of tax revenues. 

In 2020 alone, this figure stood at 20 per cent, which means €11.8 billion was collected (the highest ever recorded).

This collection is 2.5 times greater than the amount of corporation tax accounted for in 2014.

Just over 50 per cent of the corporation tax collected in 2020 was from 10 companies – all multinational – and 82 per cent of foreign multinationals.

However, the Department of Finance’s ‘Annual Taxation Report’ reveals that the current negotiations into reforming corporation tax would mean that Ireland’s corporation tax collections decrease by €2 billion.

This figure could be higher, the report states.

Paschal Donohoe, Minister for Finance, said, “The Covid-19 pandemic and associated public health measures had a relatively muted impact on overall taxation receipts, relative to the impact on the labour market – largely due to resilience in income tax, which fell only 1 per cent year-on-year.

“This is attributable to the progressivity of the income tax system and the sectoral nature of the Covid shock, with the most affected sectors dominated by employees towards the lower end of the wage scale and that were, as a result, largely outside the income tax net.”

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