Some factors, such as a rush to export some pharmaceuticals to the US ahead of potential tariffs, could see additional tax collected here in the short term, the reports says.
By and large, though, the analysis shows that recent US policy changes haven’t yet had a major impact on Ireland’s biggest taxpayers.
The analysis does show the corporation tax base here is becoming more concentrated, with a growing share of receipts coming from fewer sectors and firms, which creates its own risks of sudden swings up or down.
The report’s author, Brian Cronin, said some of the changes coming from the US may have temporarily boosted corporation tax receipts, but that could change quickly.
Corporation tax now accounts for over a quarter of the total tax take
“Corporation tax is a key part of Ireland’s public finances. But it’s also one of the most volatile and uncertain sources of revenue,” he said.
From a relatively small share of the State’s income a decade ago, corporation tax now accounts for over a quarter of the total tax take.
Roughly three-quarters of it is paid by large US multinationals, increasingly by just a handful of big players.
That is all well established and has long been flagged as a potential risk, especially as the public finances have become dependent on so-called “windfall” levels of tax being collected.
The new analysis focused on the shifting policies coming from the US.
It found that most of Ireland’s big corporation taxpayers have not been directly impacted by US tariffs – for now.
Ireland’s corporation tax revenues have become more risky
Manufacturing, pharma and the tech sector account for, on average, 87pc of the corporation tax paid by large US-owned multinationals in Ireland.
In both cases, their businesses here have avoided US tariffs to date.
The Fiscal Council also noted that corporation tax revenues here could be even higher than they might otherwise have been in the short term, a result of one large pharma group frontloading some exports to the US ahead of the expected tariffs.
Given the lack of clarity, the analysis says Ireland’s corporation tax revenues have become more risky – future receipts could be much higher or lower than current levels.
This will depend on how US policy evolves, how multinational firms respond and how global demand for key products – such as new weight-loss drugs and artificial intelligence – develops.
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