WE ALL HEAR about Ireland’s unhealthy reliance on corporation tax from multinationals to fund the public purse – but it goes further than that, the Irish Fiscal Advisory Council (IFAC) said today, with almost 20% of payroll tax and VAT coming from foreign firms.
The state spending watchdog made these observations in a blog post published today.
Although foreign-owned multinationals’ corporation tax receipts have been well documented (they paid 87% of the total in 2025), IFAC said we are increasingly reliant on other tax revenue generated by these companies.
Foreign-owned multinationals, which include the likes of Apple and Google, provide many Irish and foreign workers based in Ireland with high-paying jobs.
In the top ten corporation taxpayers, average annual income per employment was €119,000 in 2025, resulting in €2.3 billion in payroll taxes that year.
This results in “substantial payroll taxes and social contributions”, IFAC said, as well as sizeable VAT contributions through workers’ spending on goods and services.
In 2024, these companies paid over €19 billion in corporation tax – and €13 billion in payroll taxes and VAT. IFAC noted that the latter figure was more than the government spent on housing and transport combined.
The proportion of these firms’ contributions to Ireland are climbing steadily. In 2017, companies in manufacturing, tech, and financial services directly accounted for 16% of all tax and PRSI receipts.
In 2024, it was 28% – or almost €3 in every €10 collected.
Around 39,000 people are employed by each of these large firms.
IFAC, a harsh critic of the State’s reliance on corporation tax receipts, said this payroll tax reliance is less volatile due to the investment of companies in their Irish bases.