One-third of corporation tax from US multinationals

IN the past 10 years, US multinationals have been a major source of tax revenue for the Exchequer, responsible for roughly one-third of the annual corporation tax take in each year.

A recent analysis by Keith Walsh, an economist with the Revenue Commissioners, found in 2009, US companies based here paid €1.7 billion in corporation tax and “have consistently contributed over one third of all CT revenue in Ireland.”

VAT and Excise duties added another €1.8bn that year, he said. On top of that the income tax revenue by the 100,000 employed by US companies came to another €698 million.

In 2008, where the data is more up-to-date, Mr Walsh said US firms paid the revenue €4.7bn across all taxes in that year.

That compared with a total revenue stream that year of €41bn.

While the income tax figures for 2009 were not to hand when the research was carried out, Mr Walsh said the indications are that revenues paid by US companies continues to perform better than domestic companies.

As the tax take declines in the indigenous sector, the importance of US companies to the Exchequer “continues to grow in relative terms,” he said.

The importance of Ireland as an overseas location is also highlighted in the analysis.

Last year IBM, the giant computer group, ranked Ireland as first in the world in terms of job creation by foreign investment relative to population size.

In his paper presented before the Statistical and Social Inquiry Society of Ireland, Mr Walsh said while the full extent of the tax contribution can be hard to fully document investment by US companies in Ireland “is substantial.”

New figures just out from the IrishJobs.ie Jobs Index shows steady upward trend in 2010.

Jobs advertised online for the production, manufacturing and materials sector experienced the highest increase, up by 22%. This picture emerges alongside a move up the value chain toward high value manufacturing.

The website said the €5bn in FDI projects approved by the IDA over the last three years in manufacturing is having a positive impact on the level of jobs being advertised.

The Jobs Index figures for Q4, 2010, showed the highest increase in new jobs advertised for production, manufacturing and materials at +22% compared with Q3.

Jobs advertised in science, pharmaceutical and food sector were slightly below that level at 19% compared with third quarter.

IT jobs increased 12% quarter on quarter continuing the strong performance throughout 2010.

The last quarter outturn confirmed the “steady upward trend” that emerged in 2010, Irish Jobs.ie said.