Despite repeated warnings about the potential once-off nature of the receipts and the concentration risk of having so few firms paying the bulk of the money, Ireland continues to hit the corporation tax jackpot.
Revenue from the business tax swelled to a record €23.8 billion last year, almost six times the amount garnered in 2014. It equates to €5,000 for every man, woman and child in the State and could, in theory, pay for the construction of 96,000 social homes.
The money has allowed the Government to simultaneously pay down debt, stash money in a sovereign wealth fund and preside over a series of giveaway budgets. This while the rest of Europe grapples with Covid-depleted budgets and higher borrowing costs.
The surge in Irish corporate tax has been driven by the onshoring of assets here in the wake of a global clampdown on multinational tax avoidance and increased profitability generally.
A less technical explanation is that it reflects Ireland’s ongoing sweetheart status with corporate America. The State plays host to the biggest names in US tech and pharma and is destination number one for US foreign investment.
We’ve known for some time that 10 large US multinationals account for over 50 per cent of corporation tax receipts (they accounted for 57 per cent in 2022 and 52 per cent in 2023). The Irish Fiscal Advisory Council estimates that three of them account for a third of the total. Based on company filings and well-placed industry sources, we’ve attempted to identify these 10 companies.
Our list is not intended to be definitive as the companies involved – in the main – don’t publish details of their Irish tax payments. Equally many have Irish operations spread across multiple subsidiaries (some loss-making), making an assessment of their tax liabilities difficult. Nonetheless, we believe our list encompasses the main players.
APPLE
The most recent financial accounts for Apple’s main Irish subsidiary – Apple Operations International Limited (AOI) – indicate it made provisions (ignoring the deferred tax element) to pay $8.07 billion (€7.3 billion) in tax for the financial year ending September 30th, 2023, a figure that would account for almost a third of the State’s entire corporate tax haul.
However, the accounts state “the group is subject to income tax in numerous jurisdictions” suggesting not all of the $8 billion is likely to have been paid here.
Near the bottom of the accounts, the subsidiary notes that the stand-alone Irish operation generated profits of $38.5 billion. A back-of-the-envelope calculation based on Ireland’s 12.5 per cent corporate tax rate points to a tax liability here of $4.8 billion. The iPhone maker, which employs over 6,000 people in Ireland, primarily in Cork, is currently fighting a European Commission case alleging it owes Ireland more than €13 billion in back taxes, plus interest.
MICROSOFT
According to the Companies Registration Office (CRO), the software giant’s main Irish subsidiary, Microsoft Ireland Operations Limited, which employs 2,779 staff, paid tax of $652 million (up from $476 million the previous year) on the back of almost $70 billion in revenue for the financial year ending June 30th, 2023.
Microsoft Ireland Operations Ltd’s parent is another Irish registered business, Microsoft Ireland Research UC. The latter appears to be the group’s IP (intellectual property) holding company in that it licenses the rights of assets owned and developed by Microsoft to other group companies in return for royalty payments.
Its accounts note it paid corporation tax of $2.8 billion last year but this entity also has multiple subsidiaries in other jurisdictions, making it impossible to say how much of that tax was paid here. The accounts also note Microsoft Ireland Research UC paid a dividend of $38 billion to its parent. Microsoft, whose products include Windows and Office, is the world’s biggest software company. It has had a manufacturing base here since 1985.
The company behind Google’s main Irish operations, Google Ireland Limited, paid tax of €428 million for 2022. The Alphabet-owned subsidiary, which provides technical, sales and operations support to customers in more than 50 countries, said it employed 4,832 staff primarily at its Barrow Street campus in Dublin. However that was before it announced cutbacks in 2023 in response to a global tech downturn, culminating in the loss of 240 jobs here.
A separate Irish-registered entity, Google Europe International Technologies, which according to its accounts is responsible for “the exploitation of intellectual property rights”, made a profit of €1.9 billion on the back of royalty payments from group companies and paid tax of €279 million, down from €569 million a year earlier.
PFIZER
The New York-based pharma giant has several big Irish operations, employing cumulatively more than 5,000 staff. The group’s Irish subsidiaries are controlled by CP Pharmaceuticals which is registered in the Netherlands, hence the financial figures for Ireland are not broken out.
According to the most recent accounts, CP Pharmaceuticals had a tax liability of $3.3 billion (up from $2.4 billion previously) for the 12 months to the end of November 2022. We can assume a substantial portion was paid here given the scale of its Irish operations.
Pfizer was one of the first pharmaceutical companies to locate in the Republic and has invested over €9 billion in its Irish operations since first locating here in 1969. The company’s coronavirus vaccine Comirnaty generated almost $38 billion (€35.4 billion) in revenue for the company in 2022.
META
The most recent accounts filed for the social media giant’s main Irish subsidiary, Meta Platforms Ireland Limited, said it generated revenues of €58.05 billion for 2022. The revenues recorded by the Dublin-based unit account for 54.5 per cent of Meta’s global revenues of $116.6 billion in that year. The accounts indicate the company, which owns Facebook, Instagram, WhatsApp and Oculus, paid $536 million in tax.
The subsidiary is parent to just one group company meaning we can assume nearly all of the above tax figure was paid here. The company employs approximately 6,000 staff across several Irish operations, including its international headquarters in Dublin, its data centre in Meath and its “Reality Lab” office in Cork.
INTEL
Intel is even more difficult than the others to pin down. The chipmaker’s main Irish subsidiary – Intel Ireland Limited – is a branch plant of a company based in the Cayman Islands which does not disclose the profits generated or tax paid in Ireland. The US company generated $54 billion of revenue in 2023, down on previous years.
While the business is likely to be highly profitable in Ireland, it is also said to be benefiting from large capital allowances linked to several multibillion euro chip fabrication plants on its site in Leixlip, Co Kildare where it employs the bulk of its 5,000 staff here. The Leixlip facility is the company’s largest outside the US. The tech giant recently announced plans to build chip factories in the Republic and France on foot of less onerous EU funding rules..
JOHNSON & JOHNSON
The main Irish subsidiary of US pharma giant Johnson & Johnson (J&J) is Janssen Sciences Ireland. According to the latest accounts, the business, based in Ringaskiddy, Cork, generated revenue of €11.1 billion for the year ending January 1st, 2023. The accounts indicate the company paid €514 million in tax for the period.
Because the subsidiary doesn’t appear to have secondary subsidiaries outside Ireland, it can be assumed most of the tax if not all of this was paid here. J&J operates principally across 10 sites located in five counties (Cork, Dublin, Limerick, Galway and Mayo) and employs 6,000 people mainly in research and development and manufacturing.
Janssen Sciences Ireland’s accounts show the company holds €18 billion worth of IP here, of which €6 billion is impaired or written off against taxes. When the capital allowances of these blockbuster companies run out, they will presumably be liable to pay more tax in this jurisdiction, suggesting Ireland’s corporate tax take could climb further in the coming decade.
MEDTRONIC
The world’s largest medical device company became the largest Irish-based company following its $50 billion reverse takeover of Dublin-domiciled surgical supplies group Covidien back in 2014, one of the highest-profile, albeit contentious, corporate inversions of the era.
As part of the deal, the Minneapolis-based business moved its corporate headquarters to Ireland in a new holding company, Medtronic plc. It employs more than 4,000 people here, the majority at its facility in Galway.
According to the company’s latest filed accounts, it paid $530 million in tax on its international activities for the financial year ending April 26th, 2023, a significant portion of which most likely went to Revenue here.
COCA-COLA
According to the latest accounts for Coca-Cola’s main Drogheda-based Irish subsidiary, European Refreshments Unlimited, the soft drink giant generated revenues of €5.4 billion for 2022. It paid a tax charge of €132 million for the year.
European Refreshments makes and sells Coca-Cola concentrate to bottlers worldwide. The accounts show the subsidiary is wholly owned by Atlantic Industries, which is based in the Cayman Islands. According to a recent report in the Sunday Business Post, the Irish subsidiary paid €9.54 billion in dividends to Atlantic Industries in the seven-year period between 2016 and 2022.
The drinks giant is in a big legal wrangle with US tax authorities amid claims it could owe up to $16 billion (€14.7 billion) in back taxes. In a recent judgment, the US Internal Revenue Service (IRS) claimed the company had been hiding “astronomical levels” of profit in low-tax countries, including Ireland, to shield it from the US tax authorities.
MSD (Merck, Sharpe and Dohme)
MSD’s main Irish sites in Tipperary, Cork, Meath and Dublin are responsible for manufacturing approximately half of the company’s top 20 products. While the medicines giant has a large Irish footprint, employing approximately 3,000 staff, financial figures for its subsidiaries proved too difficult to track down.
MSD Ireland recently invested over €1 billion in a new site in Dunboyne in Co Meath as well as significantly expanding its existing site in Carlow. The latter, set up in 2008, was MSD’s first vaccines operation outside of the US. The company, which trades as Merck in the United States and Canada, reported worldwide sales of $60.1 billion last year.
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