Corporate tax receipts drop 30% as Trump's tariffs bite
Corporate tax
receipts fell by 30 per cent in May, amounting to a loss of over €1.1 billion when compared to the same month last year, amid signs
US tariffs
may be denting the profitability of multinationals in Ireland.
The latest exchequer returns for May, published by the Department of Finance, indicated that the Government collected just under €2.5 billion in corporate taxes last month, compared to almost €3.6 billion in May last year.
The department insisted, however, that 'once-off factors' had boosted receipts in May last year which distorted the year-on-year comparison.
Nonetheless with most EU exports currently facing a 10 per cent levy in the US, possibly rising to 50 per cent if negotiations between Brussels and Washington fail, exporting companies here may be predicting lower earnings
READ MORE
[
Subscriber Only Opinion Ireland cannot base its economic strategy on the 'Taco' theory – Trump Always Chickens Out
Opens in new window
]
On a cumulative basis, receipts from the business tax were up by €1.1 billion at €7.4 billion but this reflects once-off revenues from the EU court ruling against Apple.
When they are removed, corporate tax receipts to the end of May were down 9.4 per cent at €5.7 billion.
Minister for Finance Paschal Donohoe said:
'
May is one of the more important months for tax revenues, and the steady growth in most tax headings points to an economy that is in a relatively good position."
'The most notable feature of the May exchequer returns was in respect of corporation tax, which saw a marked year-on-year drop,' he said.
'While this reflects once-off factors last year, it nonetheless highlights the degree of concentration in the corporate tax base, wherein a small number of multinational firms can significantly impact on the overall tax yield,' Mr Donohoe said.
'In a context of unprecedented uncertainty in the international economic landscape, this serves as a timely reminder of Ireland's exposure to changes in the global trading environment, and of the vital importance of adhering to a sensible and sustainable budgetary strategy,' he said.
Overall the latest exchequer data show the Government collected €38.2 billion in tax revenue during the first five months of the year.
This was up nearly €3 billion or 8.5 per cent on the same period last year aided by positive increases in income tax and VAT.
Income tax receipts, the Government's largest tax channel, generated €14.5 billion, €630 million more than last year, reflecting the State's strong labour market.
Separate figures, published on Thursday, put the headline rate of unemployment near a historic low of 4 per cent.
VAT receipts for the year so far were also up by €600 million at €11.4 billion. The sales tax reflects consumer activity.
On the spending side, total gross voted expenditure for the five-month period amounted to just under €42 billion, up by €3.1 billion (8.1 per cent) on last year and €37 million (0.1 per cent) behind profile.
At a headline level, an exchequer surplus of €4 billion was recorded compared to a surplus of €0.8 billion last year, an improvement of €3.2 billion.
Excluding the once-off receipts arising from the Apple tax case, the underlying surplus was €0.7 billion.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Journal
8 hours ago
- The Journal
A new organisation has taken over Gaza food distribution with disastrous results - who's behind it?
WHILE THE ENTIRE population of the Gaza Strip in Palestine remains on the brink of famine, and Israel refuses to allow in thousands of truckloads of humanitarian aid, an organisation called the Gaza Humanitarian Foundation has taken over food distribution, with already disastrous results. The introduction of this new US and Israeli-backed entity into the besieged Palestinian territory has been part of Israel's plan to circumvent UN agencies and NGOs that already work in Gaza and have done so for decades. Those UN agencies and officials repeatedly condemned the establishment of the organisation, warning that it would allow Israel to weaponise the provision of food. NGOs said it would only serve to allow Israel to carry out a plan proposed by US President Donald Trump, and endorsed by Israeli government officials, which is to remove the Palestinian population from the area. At Nasser hospital in Khan Younis, people mourn those killed while gathering near a GHF centre on 3 June Alamy Stock Photo Alamy Stock Photo Trump's proposal to 'clean out' Gaza has been widely condemned as a plan for ethnic cleansing. The man who was initially heading up the organisation, US military veteran Jake Wood, resigned the day before it began operating in Gaza, citing similar concerns to those expressed by the UN. Israel has said the GHF is a means of preventing food and other supplies from falling into the hands of Hamas. In mid-May, Tom Fletcher of the UN's humanitarian affairs office called the Israeli-US plan to take over aid distribution 'a cynical sideshow'. 'Please stay away' Israeli forces have on a number of occasions now opened fire on crowds of hungry people who were making their way to distribution points operated by the Gaza Humanitarian Foundation (GHF). The term Orwellian may be overused in modern discourse but, in this case, it seems to be the most appropriate description for an ostensibly humanitarian organisation whose distribution centre almost immediately became the site of massacres. One witness to the latest Israeli attack told AFP: 'It's a trap.' Since Wednesday, the GHF has suspended all aid distribution until further notice after Israel declared roads leading to its hubs 'combat zones'. 'Please stay away from distribution sites for your safety,' the GHF said in a Facebook post on Friday. All of the Israeli attacks have taken place at a centre in the Tal al-Sultan area outside Rafah City in the far south of the territory. Advertisement Palestinians carry boxes and bags containing food and humanitarian aid packages delivered by the Gaza Humanitarian Foundation Alamy Stock Photo Alamy Stock Photo The first deadly incident happened on the morning of Sunday, 25 May, when 31 Palestinians were killed by Israeli gunfire , according to the Gaza Civil Defence agency. The following morning, Israeli forces shot dead three people, according to the International Committee of the Red Cross (ICRC). And last Tuesday, 27 people were killed by Israeli fire near the site, according to health officials. Israel has denied firing on civilians, saying it fired 'warning shots ' and calling early reports 'false' while the GHF initially did likewise. The Israeli military did admit firing at 'suspects' who they said had moved in their soldiers' direction on Tuesday. Who funds and runs the GHF? The short answer to the question of who funds the GHF is, we don't know. The organisation is registered in the United States and while it has a website , all it says is: 'Delivering critical aid and support to the people of Gaza. More information coming soon'. The New York Times reported that the idea for an organisation like the GHF first came from Israel and opposition politician Yair Lapid has suggested it is funded by the Israeli government. People carry away supplies from a GHF centre in Gaza Alamy Stock Photo Alamy Stock Photo The GHF said last month that a Western European country had donated more than $100 million but did not name the country. As for who runs the GHF, a little more is known. A former USAID contractor, John Acree, took over as John Wood's interim replacement and an evangelical preacher and former Trump campaign advisor named Reverend Johnnie Moore was named the new chairman on Tuesday. Also on Tuesday, US consulting firm Boston Consulting Group, whose participation had not previously been disclosed, terminated its contract with the GHF. With reporting from AFP Readers like you are keeping these stories free for everyone... Our Explainer articles bring context and explanations in plain language to help make sense of complex issues. We're asking readers like you to support us so we can continue to provide helpful context to everyone, regardless of their ability to pay. Learn More Support The Journal
Irish Times
8 hours ago
- Irish Times
The Irish economy grew by 22% over the past year. Yes, you read that right
Ireland's economic data was always going to be a bit special at the start of this year. But Thursday's figures were mind-bending. It is impossible to overstate the extent to which we now stand out in international comparisons. And this is not just a curiosity – it matters. The economy, as measured by gross domestic product (GDP) , was 22 per cent larger in the first quarter of 2025 than one year earlier, according to the latest estimates from the Central Statistics Office . Think about it. The figures suggest that for every €1 of activity last year, there was €1.22 in 2025. Even comparing GDP in the first quarter of this year with the last quarter of 2024, there is a rise of close to 10 per cent – this is roughly the extent of growth across the euro zone over the past decade. Of course this bonkers data is not real, in the sense that it does not reflect what is happening in the underlying economy in which we all live. How could it? As has been long discussed the headline economic data is entirely distorted by the activities and tax planning of a small number of very big US tech and pharma companies. From time to time, this has created huge distortions in the figures. A decade ago, top US economist Paul Krugman famously described a 26 per cent GDP growth rate reported for the Irish economy (later revised up to over 30 per cent) as 'leprechaun' economics . At the time the figures were distorted by massive tax-driven investments by the companies concerned, including Apple, essentially a manoeuvre by the companies involved to try to keep their tax bills down as international rules changed. READ MORE Now, as one observer put it, we are seeing another 'Krugman' moment. This time the reasons are different. Big pharma companies have been rushing product over to the US to try to get drugs and key ingredients into the market before Donald Trump announces tariffs on the sector. This has led to a surge in exports, feeding into the GDP data. Many of these are manufactured here – and some are made elsewhere but organised by Irish subsidiaries and so also show up in our figures. And so we see a massive surge in Irish GDP in the first quarter of this year. A big – temporary – decline in pharma exports in GDP will follow at some stage, as the firms involved must now have massive stocks jammed into every free warehouse in the US. Much will depend on how the tariffs story plays out. [ Welcome (back) to the era of Leprechaun economics Opens in new window ] Whether Krugman renews his leprechaun offensive or not, let's not pretend this won't be noticed. Ireland's GDP data is not some irrelevance in a quirky economic corner. The amounts of money being moved through Ireland are now enormous. Daniel Kral, chief economist at Oxford Economics , calculates that Ireland – which accounts for 4 per cent of the euro zone economy – accounted for half its total growth over the past year. Analysts have taken to looking at the figures 'excluding Ireland'. How do we pull back from all of this to judge the underlying health of the economy? Total demand in the domestic economy – adjusted by the CSO to remove the multinational factors - rose just 1 per cent over the year. But we need to look under the surface here, too. Consumer spending, a good measure of how we feel, was up by a decent 2.5 per cent. But the overall figure was dragged down by a fall in business investment, presumably reflecting the international uncertainty. So households continued to spend in the first part of the year, but businesses are taking a wait-and-see approach to big capital spending. This is likely to be reflected in the jobs market as the year goes on – and here AI is also changing the game in many sectors. Consumers may get more cautious too. Uncertainty is starting to slow the economy and this is a trend we need to watch as the year goes on. The piece of data that seemed a bit out of line this week was a 30 per cent fall in corporation tax in May compared with the same month last year. This was affected by the comparison with a strong May last year – which the Department of Finance suggests was boosted by once-off factors. Two of our biggest taxpayers, Pfizer and Microsoft – pay significant amounts of tax that month. But the key early indicator for most of the big companies is June – and what happens here will give a good pointer for the year as a whole. The figures do underline one point. It is our huge reliance on the opaque affairs of four or five massive companies – and our exposure to the sectors they operate in, their own performance and complex decisions on how their tax structures are set up. Our latest bout of data exceptionalism again puts Ireland in the spotlight, when it would have been better to keep the head down. It underlines the outsize take Ireland is getting from pharma and tech activity in the EU – both contentious points in the White House. Notably, the US added Ireland to an economic watch list this week, based on the size of our trade surplus. We are very much on the radar in Washington. Our corporate tax take and manufacturing base are looked on enviously not only from the US , but from elsewhere in Europe. [ 'No long-term commitments to anything' – Ireland's economy is experiencing a silent slowdown Opens in new window ] The advance shipping of products again focuses attention on the scale of activity and tax planning in Ireland by big pharma companies. And this causes a rollercoaster of cyclical activity. But what really counts is longer-term, structural issues. Will these pharma giants decide over time – and it would take years – to relocate some of their production to the US? Will their profits and thus tax payments here be hit by Trump's policies? Or will they – or some of the tech giants – alter their corporate structures so that they pay significantly less tax here? It comes down to whether Trump's policies change the way the economic and corporate world operates fundamentally, a fair bit or not much at all. As Ireland benefits from the current system so much, the more it changes, the more risks there are for us. The coming months will tell a lot.
Irish Times
9 hours ago
- Irish Times
Nine-figure payouts to Ryanair and Starbucks CEOs are controversial, but Michael O'Leary can point to results
Michael O'Leary has hit his target. Ryanair 's share price stayed above €21 for 28 days, earning him a €125 million bonus if he stays until 2028. The deal has its critics. 'Morally questionable,' said Luke Hildyard of the High Pay Centre, a UK think tank. Others argue such payouts reward luck more than leadership, with cheap oil, index inclusion and billions in share buybacks all helping lift Ryanair's stock. O'Leary might counter that Ryanair shares have more than doubled since the deal was struck in 2019, comfortably outperforming rival airlines. Contrast that with Starbucks , where Brian Niccol was handed a reported $113 million sign-on package last August to replace embattled CEO Laxman Narasimhan. Shares soared 25 per cent on the news, adding $21 billion in market value. READ MORE [ Corporate tax receipts drop 30% as Trump's tariffs bite Opens in new window ] Since then, Starbucks has slashed head office jobs, trimmed menus and promised a return to its coffeehouse roots. But the results remain bitter. Margins and profits are down. Competition remains fierce in China. The stock tanked after last month's earnings miss and has now given up almost all of its Niccol bump. Niccol may yet prove his worth – his turnaround of Chipotle is textbook stuff – but the caffeine hit investors got from his arrival has faded fast. O'Leary, never one to miss a jab, might well look at Starbucks and say: at least I had to do something to get my millions.
