Minister welcomes report on corporation tax

Following the publication of Corporation Tax – 2023 Payments and 2022 Returns by Revenue, the Minister for Finance, Michael McGrath TD, noted that corporation tax is now the second largest tax revenue stream for the State. Acknowledging that the high concentration of receipts among a small number of companies brings a significant amount of risk, the Minister noted steps taken by Government to mitigate this risk and protect the public finances into the future. 

Highlights from the publication ‘Corporation Tax – 2023 Payments and 2022 Returns’ include: 

• Corporation tax receipts in 2023 were €23.8 billion (up 5.3 percent year on year), representing 27 percent of total tax receipts 

• 85 percent of receipts were from large corporates with the top 10 corporation tax paying companies accounting for 52 percent of total net receipts (down from 57 percent in 2022) 

• Net receipts from smaller companies increased by €385 million compared with 2022, a growth of 9 percent 

• Manufacturing (38 percent), Finance & Insurance (15 percent) and ICT (17 percent) were the largest sectors where corporation tax was paid in 2023.   

Commenting, Minister McGrath said: 

“I welcome the publication of the Corporation Tax 2023 Payments and 2022 Returns report by the Revenue Commissioners. 

This is an extremely valuable piece of work that highlights key trends in what is now the second largest tax revenue stream for the State. Last year we took in nearly €24 billion in corporation tax. 

However, we must not forget that these receipts are highly concentrated with just a few firms paying the bulk of the tax. My Department has estimated that roughly half of the €24 billion could be windfall in nature. In addition, we have seen major changes in the corporation tax environment in recent years with the OECD BEPS process. Ireland has committed to the two pillar agreement and has fully implemented Pillar II and is fully engaged in negotiations on Pillar I. 

What all this means is that we cannot afford to fund permanent increases in expenditure on the back of tax receipts that may be temporary in nature. 

Government has taken steps to mitigate this risk. Government debt has fallen by around €15 billion from its peak of €236 billion during the pandemic and we are continuing to run strong Government surpluses. 

I am currently bringing legislation through the Oireachtas that would establish two new long-term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. 

The Future Ireland Fund will have a long term investment focus and has the potential to grow to €100 billion by 2035. It will be used in the coming decades to pay for extra costs we know will occur due to demographics and the climate and digital transitions. 

The Infrastructure Climate and Nature Fund will be used to maintain our high levels of capital investment during an economic downturn. This will ensure that critical pieces of infrastructure are delivered and that employment is supported at a time when the economy needs it most. 

I expect that this legislation will be passed by the summer and the two new funds will be established later this year.”