Sunday 8 December 2019

Profits surge sees 16,000 more companies pay corporation tax

Finance minister Michael Noonan
Finance minister Michael Noonan

Gordon Deegan

Sixteen thousand additional firms paid corporation tax last year, adding €470m to the total raised.

More firms paid the tax because profits rose across the economy, according to new figures from the Revenue Commisioners.

The figures providing fresh insight into the surge in corporation tax that helped lift the Exchequer last year, including a falling reliance on multinationals. The chairman of the Revenue Commissioners, Niall Cody, said an analysis by Revenue shows that the main factor driving the increase in tax receipts in 2015 "is likely to be increased profitability".

Last year's corporation tax net receipts of €6.87bn were 49pc ahead of the previous year's tally and 50pc ahead of budget forecasts.

In a letter to Finance Minister Michael Noonan dated April 26, and released following a Freedom of Information request, Mr Cody said the increase in the tax take is explained by a number of factors.

These include balances associated with earlier accounting periods in 2015, more tax paid by companies that already paid the tax and a new cohort of tax payers.

"Approximately €470m in payments are received from roughly 16,000 companies that did not pay corporation tax in 2014." Companies only have to pay corporation tax if they make a profit.

In the letter, Mr Cody told Minister Noonan: "Companies that paid corporation tax in 2014 paid more than €1.8bn additional corporation tax in 2015 - over €400m of which is in respect of balances associated with earlier accounting periods.

Almost 80pc of that take was from foreign-owned multinational corporations, but that share is falling, he said. He added: "While there are factors specific to companies or sectors, the growth in receipts in 2015 reflect approved trading conditions, in particular of foreign owned multi-national companies.

"While corporation tax is concentrated among payments by large multi-national companies, the analysis shows that the growth in receipts in 2015 is broad based in nature and not solely arising from foreign-owned multinationals. Mr Cody stated: "Payments from indigenous companies, while lower in monetary terms, are growing at similar rates. Overall, more companies paid tax in 2015 and their average payments were higher."

Improved performance at banks helped tax receipts with AIB paying €534m in corporation tax and Bank of Ireland paying €285m.

CRH paid €304m, Ryanair €115m and Microsoft €113m.

Irish Independent

Also in Business