Dependence on corporation tax from US firms leaves State vulnerable
Risks from reputational damage and potential sudden outflow if US tax law changes
At least half of the more than €8 billion the exchequer will receive this year in corporation tax is attributable to the transfer of profits to Ireland by US multinationals. Photograph: Eric Luke
Since the economy began to recover, the share of corporation tax in government income has dramatically increased. Today this source amounts to more than 10 per cent of government revenue, up from 6.5 per cent in 2014.
Not only are the public finances very dependent on corporation tax receipts, but this revenue is dominated by a handful of companies. That makes it potentially volatile.