Ten companies contributed 57% of total corporation tax take in 2022

Finance Minister Michael McGrath has warned against building up permanent expenditure based on receipts which 'could prove to be temporary'. Picture: Damien Storan

The percentage of corporation tax receipts being paid by just 10 companies in Ireland has grown to 57%, as the Finance Minister warns against building up permanent expenditure based on this “windfall”.

On Wednesday, the Revenue Commissioners published its annual report for 2022 which showed net corporation tax receipts collected came to €22.6bn, up 48% on 2021. Corporation tax is the second largest tax-head representing 27.5% of net tax receipts in 2022.

The Government is expecting to run surpluses over the coming years based largely on increasing tax take from these corporations. It is projected to take in €24.3bn in corporation tax this year and €25.1bn next year.

The top 10 companies are now contributing 57% of the corporate tax receipts — an increase from 53% in 2021. These 10 companies contributed more than €13bn to the total pool of corporate tax receipts.

Finance Minister Michael McGrath said his department estimated that about €12bn in corporation tax expected this year was “windfall in nature” and “cannot be relied upon in the future”.

“Windfall receipts are now accounting for a growing proportion of our revenues. As Minister for Finance, I am determined that we use these receipts wisely to underpin the resilience of our public finances into the future,” he said.

He said they have to “avoid the mistake” of building up permanent expenditure and taxation commitments on the back of these receipts which “could prove to be temporary”.

“To make such a mistake would be to expose taxpayers, and the sustainability of our finances, to unnecessary and unacceptable risk,’ Mr McGrath said.

In total, €19.6bn worth of corporation tax receipts came from foreign-owned companies, with Irish-owned multinationals contributing €928m and non-multinationals contributing €2.1bn.

Net tax receipts from the largest companies increased by €6.6bn, or 51%, during 2022, and accounted for 86% of all receipts.

The manufacturing sector, which includes the pharmaceutical sector, accounted for more than €10bn — up €5.66bn — while information and communication companies, which includes numerous technology companies, accounted for €4.18bn — up €922m.

Two sectors saw their overall corporate tax contributions drop in 2022 compared to 2021.

The administrative and support service sector’s contribution dropped €86m to €1.2bn and the wholesale and retail trade sector saw a decrease in tax receipts in 2022, dropping €49m to €2.3bn.

More than 77,100 companies paid corporation tax in 2022, with 63,647 paying between €1 and €40,000. A total of 171 companies paid more than €10m.

A total of €833m was paid in 2022 by 26,000 companies that did not pay corporation tax in 2021.

On Tuesday, the Central Statistics Office revealed corporate profits surged by nearly 20% in 2022, driven by large increases in sectors dominated by multinational companies such as industry and technology.