According to the report, up to €6 billion in corporate income tax is “at risk” in the future.

Between €4 billion and €6 billion in corporate taxes last year were “windfall” receipts that could be at risk in the future, the Treasury estimates.

Corporate tax revenues are expected to reach around 20 billion euros this year, the ministry said, double the pre-pandemic level.

Treasury Secretary Paschal Donohoe said how the government uses the tax windfall in the 2023 budget will depend “on the level of intervention we have taken to address the real damage and impact” of the cost-of-living crisis.

“We need to think about how best to use the revenue we have now,” he said today.

“We now have an immediate risk – a risk of how incomes fall, the impact on employment from rising energy prices. It is a risk that demands and requires action, which we will do.”

Corporate tax revenue now accounts for a quarter of total tax revenue, with one in eight euros collected coming from 10 large companies, according to a new ministry report.

Mr Donohoe said it was a “concentration risk”.

Corporate tax receipts this year could be four times higher than in 2014, the last year before a “level shift” on which multinationals invest their earnings, the report says.

It also said that “it is not difficult to imagine a situation” where unexpected revenues could be more than €6 billion.

That is more than a third and almost half of the 15.3 billion euros in corporate tax revenue for 2021.

The report noted that “the optimal approach would be to use some of this temporary revenue to replenish the emergency fund, or alternatively to capitalize on a fund designed to mitigate future fiscal challenges.”

The Regentag Fund was set up in 2019 and reached €2 billion before the pandemic, but has been scoured to fund economy-wide support for businesses and households over the past two years.

Mr Donohoe said it was up to the government to decide whether some windfall tax revenue should be used to top up that fund.

“My view on this is that we need to build resilience in the coming period,” he said.

“It is very possible that the level of corporate tax revenue for our country could effectively be double what it was before Covid-19 arrived in Ireland.

“This surge and a shift of this magnitude must inform how we think about the future and what might happen if that corporate tax revenue fell or didn’t rise at the rate it’s been rising in recent years.”

The government has previously estimated that public finances could face a €2 billion damage from a global deal to tax multinationals at 15 percent of their global earnings.

Mr Donohoe said a failure to implement this deal, brokered by the Organization for Economic Co-operation and Development and agreed in principle last October, would increase “trade risks” and “economic risks” and be far more “challenging” for Ireland.

“If we go back to day zero and try to start work on global corporate tax reform again, it will be far more risky for the global economy and far more challenging – and far more difficult – for the Irish economy.”

He said he does not support moving forward at EU level without Hungary, which vetoed the tax deal at the last minute earlier this year.

“We don’t want to exclude anyone in this regard. Making decisions based on unanimity is a really important principle.”

The EU finance ministers will discuss the tax deal at their meeting in Prague this weekend.

https://www.independent.ie/business/budget/up-to-6bn-in-corporation-tax-at-risk-in-future-report-finds-41971706.html According to the report, up to €6 billion in corporate income tax is “at risk” in the future.

Fry Electronics Team

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