Booming corporate tax receipts in Ireland could continue to grow into 2025 and 2026, despite looming global trade threats, according to the Irish Fiscal Advisory Council (IFAC). As reported by Reuters on Tuesday, the country’s independent fiscal watchdog identified several factors that could sustain or even boost the volatile but lucrative stream of revenue.
Corporate tax revenues have soared six-fold since 2014, reaching €28 billion last year, nearly 29% of all tax collected, giving Ireland some of the strongest public finances in Europe. That figure excludes an additional €11 billion in back taxes owed by Apple. While Ireland’s Department of Finance forecasts a 2% decline in these tax receipts this year, returning to 2024 levels by 2026, IFAC suggests there are compelling reasons to believe the opposite.
One key factor is global tax reform. IFAC challenged the department’s projection that OECD-led reforms would reduce Ireland’s corporate tax intake by €2 billion annually from 2026, calling that estimate “not credible.” Instead, the council expects the reforms to increase Ireland’s corporate tax take by around €3 billion from 2026. The anticipated revenue losses from reallocating profits to other countries have not materialized, while Ireland has already raised its corporate tax rate from 12.5% to 15% for large multinationals.
Another boost may come from Ireland’s tech and pharma sectors, many of which are U.S.-owned and remain unaffected by current tariffs. “Many of Ireland's main corporate taxpayers… expected their global profits to increase this year,” the report said.
Additionally, Irish pharmaceutical exports surged by 154% year-on-year in the first quarter, as some U.S. firms ramped up production ahead of possible tariff changes. This surge could translate into even greater tax payments in 2024.
Finally, the phased exhaustion of capital allowances used by companies that transferred intellectual property to Ireland could yield “billions” more in corporate tax in the years ahead. “We don't see any downside risks to the tax take in the short term, based on broad macroeconomic trends and the current tariff regime,” said IFAC chair Seamus Coffey. He added, “We don't see it but it doesn't mean it's not there. That’s down to the profitability and decisions these companies make.”
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