The Irish Times’ view on Big Tech’s corporate tax yield: a risky bet


Apple, the world’s most valuable company, posted record sales of popular products such as the iPhone before Christmas and a whopping net profit of $34.6 billion (31 billion euros) in the three months before December. The results come weeks after Apple, which has a large operation in Cork, became the first global company to reach a market capitalization of $3 trillion, albeit briefly.

The performance deserves attention as Apple is widely seen as Ireland’s biggest taxpayer, meaning it has a real impact on state finances. Apple is of course only one of the elite of 10 international companies whose corporate tax payments are so large that they account for more than half of all corporate taxes paid to the public treasury. These revenues jumped during the post-crash recovery, reaching a record of 15.3 billion euros in 2021 after a relentless increase of 3.5 billion euros in 2011. Payments, now the third source of revenue for the government, were only marginally eclipsed in 2021 by VAT proceeds. It’s risky because corporate taxes are volatile – they can fall as sharply as they rise. The exposure is magnified only by the high concentration of revenue from a small number of very large corporate taxpayers.

These are key days in the business calendar as many public companies report quarterly and annual results to the market. It follows that the financial reports of Apple and other major taxpayers will come under scrutiny in Merrion Street. Statements so far point to a continuation of the pandemic-fueled boom in the systemically important tech sector for Ireland. However, not everything is a one-way street. Software group Microsoft, another top 10 taxpayer, reported record sales and profits last week, with its shares rising on a positive outlook for its cloud computing unit. Shares of chipmaker Intel fell on disappointment with its earnings forecast. Results are expected this week from two other tech giants with big Irish tax payments: Alphabet, the owner of Google; and Meta, owner of Facebook.

The pharmaceutical sector is equally important. Those making big payouts here include Johnson & Johnson, which forecast 2022 earnings ahead of expectations and predicted better prospects for a Covid-19 vaccine hit by uneven demand. Another is Pfizer, whose results next week will reflect sales of the blockbuster coronavirus vaccine it developed with Germany’s BioNTech.

This all stems from a successful foreign investment policy that has made Ireland a global business hub. But if the interest of the State and the performance of companies were aligned in terms of job creation, the alignment is all the greater today because of taxation. This makes the state more vulnerable than ever to the vicissitudes of individual business commerce, their markets, and the decisions they make.


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