May sees a sharp fall in corporation taxes

When the Apple tax receipts are excluded, corporation taxes are down almost 10% this year

The Department of Finance said a drop in Corporation taxes reflects once-off factors that boosted May 2024 receipts.

Corporation tax receipts saw a marked drop in May, falling by almost a third compared to the same month last year.

The latest Exchequer Returns show that on a cumulative basis, corporation tax receipts to the end of May amounted to €5.7 billion, down 9.4% on the same period last year. The drop again highlights the volatile nature of the tax pillar, dominated by a small number of multinational companies. The Department of Finance said the drop in May reflects once-off factors that boosted May 2024 receipts, distorting the year-on-year comparison. 

The Department said overall tax receipts for the first five months of the year rose to €38.2bn, an 8.5% increase on the same period last year.

The State enjoyed a €4bn surplus to the end of May, an improvement of €3.2bn on 2024. However, when receipts arising from the Court of Justice of the European Union (CJEU) ruling for the Apple Tax Case are excluded, the underlying position was a surplus of €0.7bn, a decrease of €0.1bn on the same period last year.

Income Tax receipts of €2.8bn were collected in May with Income Tax receipts so far this year amounting to €14.5bn up 4.5% on last year.

May is a VAT-due month and receipts of €3.5bn were up on the same month last year by €0.1bn.

On a cumulative basis, receipts of €7.4bn were up by €1.1bn on the same period last year. When once-off CJEU revenues are excluded, cumulative corporation tax receipts to end-May amounted to €5.7bn, down by €0.6bn (9.4%) on the same period last year.

Reacting to the figures, the Minister for Finance, Paschal Donohoe said the most notable feature of the returns was the 'marked' year-on-year drop in corporation taxes. "While this reflects once-off factors last year, it nonetheless highlights the degree of concentration in the corporate tax base, wherein a small number of multinational firms can significantly impact on the overall tax yield," he said.

“In a context of unprecedented uncertainty in the international economic landscape, this serves as a timely reminder of Ireland’s exposure to changes in the global trading environment, and of the vital importance of adhering to a sensible and sustainable budgetary strategy.”

The Minister for Public Expenditure Jack Chambers said the data shows gross spending of €42bn, an increase of 8.1% on spending this time last year. “We are seeing a significant increase in capital spending in particular, up by almost a third year on year. This underscores Government commitment to tackling infrastructure gaps in our economy and society."