Corporate Taxes, Immigration, And Economic Growth In Ireland

Ireland's corporate taxes are soaring and so its economy is also surging. Recent loose immigration rules have no doubt contributed - half of the foreign born population of Ireland arrived in the last five years providing it with a surge of fit immigrants whose talents power economic growth.

But, it isn't clear how much its role has a tax haven for multinational companies seeking to shelter income from international taxes by putting "hot assets" like intellectual property upon which royalties are due distorts the GDP growth cited in this story. Ireland's government itself essentially keeps two sets of books to address this distortion for internal policy-making purposes, because the tax sheltered assets make Ireland look more affluent than it actually is even though it isn't doing horribly. But, the increased corporate tax revenues are less subject to manipulation.

The republic is enjoying a €8bn corporate tax windfall after bumper pandemic-enhanced revenues from tech and pharmaceutical companies. The tax take from companies attracted by Ireland’s 12.5 per cent corporate rate has soared since 2015 and leapt a further 30 per cent last year compared with 2020.

Ireland’s economy expanded by 6.3 per cent over the second quarter, against an EU average of just 0.6 per cent. So great was the impact from multinationals that Ireland’s numbers distorted EU figures, despite the nation of 5.1mn making up less than 3 per cent of the region’s economy.

Here is more from the FT.

From Marginal Revolution. 

The comments to the Marginal Revenue article quoting the Financial Times article note that in Ireland:

Half of corporate tax receipts of €15.3bn last year came from just 10 companies — among them Apple, Google, Intel, Meta, Amazon and Pfizer.