Irish government tax haul increases as economy continues to grow
Ireland’s business-friendly tax regime has drawn legions of multinational companies to the country, boosting tax revenues and prompting political attacks from Donald Trump and Europe. Leo Varadkar’s government has reported a record €50.7bn tax haul for 2017, taking it within touching distance of a balanced budget in 2018 for the first time in more than a decade. Corporation tax revenues have practically doubled since 2015. The data reflect increased corporate profitability but also the transfer of multinational assets to Ireland to benefit from its low 12.5 per cent corporate tax rate. Amid an international outcry against aggressive corporate tax avoidance globally, such transfers have led to criticism of Ireland and information and communications technology groups (ICT) such as Apple that use the country as a European hub. €8.2bn Corporation tax receipts last year, compromising 16% of tax revenues Tax payments by individual companies are not made public. But Tim Cook, Apple’s chief executive, said it was “the largest taxpayer in Ireland” when Brussels ruled in 2016 that its Irish tax scheme, since changed, constituted a form of illegal state aid. Ireland and Apple rejected such findings and have appealed against the ruling. Mr Varadkar defended his country when he was harangued over tax after he addressed the European Parliament in Strasbourg this month. “Ireland is not a tax haven. We don’t want to be a tax haven and we certainly don’t want to be seen or perceived as a tax haven, and we have no interest in fact in a race to the bottom,” Mr Varadkar said. Ireland is already worried that Brexit could inflict severe economic damage. Paschal Donohoe, Ireland’s finance minister, has said Dublin’s tax system will continue to be competitive “even against the context of changes being made in the US”. He has also said Dublin expects corporate tax revenues will be sustainable until 2020 at least, citing independent advice.