Corporation Tax to Decline

By Steven Galvin - Last update


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The Minister for Finance, Paschal Donohoe, T.D has said tax receipts from corporation tax in Ireland will begin to decline from 2023 onwards.

Donohoe comments come in response to new figures which revealed that Irish tax receipts surged to their highest ever level last year at 68.4 billion euro, reducing the Exchequer deficit down to 7.3 billion euro.

This sum is the highest recorded tax yield, eclipsing the the previous highest figure in 2019 by more than nine billion euro. Corporation tax rose by just under 30%, making it the country’s second largest revenue in the state.

A low corporate tax rate has been a key part of the Irish economic policy for a number of years. However, as a result of last year’s decision to to join the OECD framework for a global rate of 15% tax, Ireland gave up its highly prized previous rate of 12.5%.

Corporation Tax to Decline

Paschal Donohoe said he expects that Ireland will begin to see corporate tax revenue decline from 2023 onwards .

“If you look at where we are with this rate, overall Ireland will lose money and nobody knows this better than me,” he said.

“We’ll lose money because of two things happening. The first thing we will lose money from over time will be the full implementation of the global tax reform package.”

He added that this was not just the reformed rate of tax, but “the change that will happen regarding where tax is paid”.

“Secondly, many of the large tax payers are in a position of very high profitability due to other things that have happened in the global economy.

“And we cannot, nor should we expect, that to continue. So we will get to a point where our corporate tax revenue – and I’ve been saying this in particular since 2018 – will come down.”

He said that he expects that in the Government Budget for 2023, the Irish corporate tax rate will be set at 15%.

 



Steven Galvin

Scale Ireland Regional Start-up Summit
Social Enterprise Development Fund 2022 – 2023


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