Half of Ireland's corporate tax intake paid by just three companies

New research from Ifac has found that 46% Ireland's corporate tax intake in 2024 was paid by just two tech companies and one pharmaceutical company 

Ifac said just three companies contributed €13bn in corporate tax in 2024.

Ireland's reliance on just a small handful of companies for its corporate tax receipts has increased substantially, exposing the State's public finances to even further risk and uncertainty.

New research conducted by the Irish Fiscal Advisory Council (Ifac) found that almost half (46%) of the corporation tax collected in 2024 came from just three companies, equivalent to around €13bn. 

Ifac said this reflects the increasing concentration of Ireland's corporate receipts, with previous research from the council suggesting that the three companies accounted for around a third of all corporation tax receipts from 2017 to 2021.

Corporation tax receipts almost doubled between 2021 and 2024, Ifac said, even when receipts from the Apple tax judgement are excluded. This sharp increase was largely driven by increased payments from the top three players.

These three companies are all in the tech and pharma sectors, the council said, with the two largest payers both in the tech sector. 

"The corporation tax paid by these two groups has increased substantially," Ifac said. 

"We estimate that together, these two tech companies paid almost €11bn of corporation tax in Ireland in 2024, equivalent to almost 40% of total corporation tax receipts."

As corporation tax revenues become more concentrated in a small number of companies, Ifac has warned that they also become more risky, with future receipts now open to being much higher or lower than current levels.

Looking ahead, Ifac said that all three companies continue to perform strongly. 

"On the upside, profits in the tech sector are likely to increase further, aided by advances in artificial intelligence and growing demand for their products and services," the council said.

"In the pharma sector, Ireland is likely to continue to benefit from a surge in demand for weight-loss and diabetes medicines."

In addition, the 15% minimum effective tax rate for large corporations will lead to increased corporation tax from 2026 onward, Ifac said, with previous estimates suggesting that this higher tax rate could yield an additional €5bn in corporation tax receipts.

Added risk

However, Ifac said there were also clear downside risks, with tighter regulations or lackluster demand for new products in the tech sector potentially weakening profits. In addition, the fiscal watchdog noted that big investments in AI may not deliver the high returns previously anticipated. 

In the pharma sector, it warned that efforts to reduce branded drug prices in the US could reduce the profitability of the sector.

“This research highlights how reliant Ireland’s corporation tax has become on just three companies," said Brian Cronin, Economist at Ifac and author of the corporation tax research.

"These companies continue to perform strongly, but their profits and the taxes they pay remain subject to significant uncertainty. As a result, corporation tax receipts could be substantially higher or lower than current levels in the medium term.”

The new research comes ahead of Ifac's tenth annual "Path for the Public Finances" conference, which is being held this week at the Royal Irish Academy.