Ireland’s corporation tax averages out ‘at just under 11%’

Department of Finance research on country’s controversial tax code disputed by TD

Ireland's effective rate of corporation tax has averaged between 10.7 per cent and 10.9 per cent since 2003, according to a technical paper by the Department of Finance.

The department said the research was commissioned in order to clarify “the seemingly conflicting figures” often quoted in relation to the tax.

The paper, by University College Cork economist Seamus Coffey, examined a number of different approaches to calculating the amount of tax paid.

It showed that since 2003, the effective corporation tax rates based on the CSO’s measure of profit (net operating surplus) and the Revenue measure of profit (taxable income) had averaged 10.9 per cent and 10.7 per cent respectively.


The finding runs counter to much of the commentary surrounding Ireland’s controversial company tax code.

The Government has come under increasing pressure to outlaw certain tax structures, like the so-called "double Irish" scheme, which are used by multinationals like Apple and Google to avoid paying billions in tax.

The “double Irish” scheme exploits a loophole in the law, permitting companies to be registered in the Republic, even though they are based elsewhere.

The Government insists, however, the 12.5 per cent rate of corporation tax remains a cornerstone of Irish economic policy and is non-negotiable.

Mr Coffey said: "If you take the total amount of profit earned in Ireland, and then look at the amount of tax that was paid, on average you get a tax rate of around 11 per cent."

“So pretty close to the 12.5 per cent, as would be expected, because of the limited number of reliefs that are available,” Mr Coffey said.

In an interview on RTÉ’s News at One programme, he was asked about allegations that some multinationals operating here paid only a fraction of the effective rate.

“Well we can just consider what’s happening in Ireland. Like the Irish corporation tax regime doesn’t have the ability to tax profits that are earned elsewhere, we can tax profits that are here,” he said.

“And there might be issues about the kind of structure that companies can use to move their profits from one location to another.”

Mr Coffey’s findings were strongly disputed by People Before Profit TD Richard Boyd Barrett TD.

Mr Boyd Barrett claimed the research glossed over “the very real dispute about the real corporate tax rate in Ireland” and how much tax big corporations were paying as a proportion of their profits.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times