Additional revenue linked to jump in contract manufacturing by several Irish-based firms, including Apple’s main Irish subsidiary, Apple Operations International
The profit generated from the sale of these phones is expected to be channelled directly through Apple’s Irish operation, resulting in a bigger tax liability for the company here.
As a result, the department’s €24.3 billion projection for corporation tax this year is expected to undershoot by at least €2 billion, the sources said.while adding further pressure on Minister for Finance Michael McGrath to open up the purse strings in the budget later this year.last year, placing it ahead of VAT as the State’s second-largest revenue source. The total was three times the €6.9 billion collected in corporation tax as recently as 2015.
The main driver of the surge in receipts last year was Apple. According to the Companies Registration Office, Apple Operations International reported a significant increase in income last year while deductions for capital allowances did not keep pace, meaning the company’s tax liability here shot up.
The forecast for corporation tax this year comes on the back of a report by the Irish Fiscal Advisory Council, which indicated that the business tax base was even more concentrated than previously thought with just three firms accounting for a third of all receipts between 2017 and 2021, While the three firms were not named, the first two are understood to be Apple and Microsoft while the third is likely to come from a shortlist that includes Pfizer, Intel and Google.
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