Booming corporate tax receipts brought in €1.5bn last month
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The Government is continuing to tap a bounty from booming multinationals as it collected almost a billion euro more than anticipated in corporation tax receipts last month alone.
The latest Exchequer returns show corporation taxes brought in almost €1.5bn in October, which was €964m more than anticipated, although the returns were boosted by the settlement of tax cases that accounted for €300m of the receipts, the Department of Finance said.
Nonetheless, the performance of corporation tax receipts during the pandemic continues to be extraordinary.
Receipts from the corporates for the first 10 months of the year are running at just over €9.5bn -- and ahead by €2bn of the haul that had been anticipated.
That means that corporation tax receipts will likely exceed the almost €12bn in corporation tax receipts collected for the whole of last year because the big paying months for companies to pay their taxes are still to come. Overall, the Exchequer pulled in €5bn in tax receipts in October, of which 30% were accounted for by corporation tax.
Multinationals account for the lion's share of all corporation tax receipts, and the profits of the pharma and computer giants based here have boomed during the pandemic.
The bounty for the Government comes as Ireland and the multinationals have come under unprecedented international focus this year.
After fighting a rearguard action, the Government last month signed up to the global agreement that will mean that Ireland will raise to 15% the tax it levies on multinationals, up from the 12.5% rate under the existing and long-standing regime.
“Corporation tax receipts in October were higher than expected, once again illustrating the inherent unpredictability and volatility of this revenue stream," Finance Minister Paschal Donohoe said. "Despite the further clarity that now exists with international tax reform, there is still a high level of uncertainty in relation to its impact on Ireland," he said.
The other big tax sources performed reasonably well. Income taxes brought in over €2.2bn in October, which was €330m more than anticipated, the Department of Finance said. For the first 10 months, income tax receipts amounted to €20.7bn.
Excise duties amounted to €546m in the month and €4.6bn for the full 10 months, which was €320m more than collected in the same period last year.
In a non-payment month, Vat receipts brought in only €169m. For the first 10 months, Vat receipts have amounted to €12.6bn in revenues.
On the spending side, expenditure for the first 10 months amounted to €67.5bn, almost €2.5bn less than anticipated. Expenditure Minister Michael McGrath said that spending was running at €2bn more than last year.
Peter Vale, tax partner at Grant Thornton Ireland, said the October returns represented "more good news for the Government".
"Overall, the particularly strong October figures point to full year tax revenues of close to €10bn ahead of 2020 receipts, which would be a remarkable outcome," Mr Vale said.