Covid-19 fails to dent Irish corporation tax revenue

13 Oct 20

Ireland expects its corporation tax yield to rise again this year, despite the backdrop of the global recession caused by Covid-19, an official document has revealed.

web_paschal-donohoe_shutterstock_1399405616.png

Irish finance minister Paschal Donohoe

A budget white paper shows the government expects to have received €12.5bn in corporation tax this year, based on its receipts up to the end of September.

It took €10.9bn last year, which was €1.4bn more than it had expected and was €500m more than in 2018.

This year’s expected rise in corporation tax takings will come despite total tax revenue being projected to fall by about €2.5bn from 2019.

Many large companies have operations headquartered in Ireland to take advantage of one of the lowest rates of corporation tax in the EU, and many of them are large technology or pharmaceutical companies whose products have been in high demand during the pandemic.

Before Covid-19, the government had hoped to run budget surpluses for several years, to build resilience against potential drops in corporation tax yields.

Finance minister Paschal Donohoe has repeatedly said Ireland’s public finances need to remain robust because the tax cannot be counted on in the long term.

However, one threat to corporate tax revenue, the talks being led by the OECD aimed at ensuring digital businesses pay taxes in territories where they trade and not just where their headquarters are located, admitted this week that it would not reach a consensus by its end-of-year target.

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Related jobs

Most commented

Events & webinars