Government receives €1bn corporation tax windfall

Significant payment due to exchequer later this year as multinationals pay more tax

Minister for Finance Paschal Donohoe is expected to outline details of a €1 billion corporation tax windfall on Friday evening. Photo: Nick Bradshaw for The Irish Times

Minister for Finance Paschal Donohoe is expected to outline details of a €1 billion corporation tax windfall on Friday evening. Photo: Nick Bradshaw for The Irish Times

 

An extra €1 billion in corporation tax will be collected this year over what had initially been expected, driving receipts from the tax well above €9 billion for 2018.

It is understood that the massive corporation tax windfall will see a significant payment made to the exchequer in the final quarter of this year.

Informed sources said that, due to a technical change in accounting standards internationally, multinational companies have had to pay significantly higher levels of corporation tax than had been initially expected.

Corporation tax was already running around €300 million ahead of profile by the end of September, but it is understood that the latest moves will see the entire corporation tax haul for 2018 be €1.1 billion higher than had been expected.

It had initially been estimated that €8.5 billion in corporation tax would be collected this year, amounting to almost €16 per cent of the total tax take.

The latest development means the anticipated haul for 2018 will be over €9.5 billion.

Minister for Finance Paschal Donohoe is expected to outline details on Friday evening.