{"id":281309,"date":"2026-01-12T19:57:08","date_gmt":"2026-01-12T19:57:08","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/281309\/"},"modified":"2026-01-12T19:57:08","modified_gmt":"2026-01-12T19:57:08","slug":"big-chunk-of-exchequers-income-could-vanish-if-handful-of-us-companies-change-their-tax-profile","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/281309\/","title":{"rendered":"Big chunk of exchequer\u2019s income could ‘vanish’ if handful of US companies change their tax profile"},"content":{"rendered":"

Continued over-reliance on corporate tax receipts from US multinationals remains one of the biggest threats to Ireland\u2019s financial stability in 2026, leaving the country in \u201cbig trouble if it dries up\u201d, economists have warned.<\/p>\n

A sudden shift in the geopolitical scene outside the country could plunge Ireland into recession.<\/p>\n

The situation in Venezuela<\/a>, Donald Trump\u2019s aggressive rhetoric around Greenland<\/a>, and the combustible internal situation in Iran<\/a> could all spell trouble for an economy beholden to corporation tax from US companies, they said.<\/p>\n

An escalation in the simmering global volatility could pierce Ireland\u2019s ability to maintain its growth, especially with thousands of hard-pressed households already having to absorb rising food, health, and other prices<\/a>, they added.<\/p>\n

Grant Thornton\u2019s chief economist Andrew Webb described the State\u2019s heavy reliance on corporation tax as \u201cnerve-wracking\u201d.<\/p>\n

\"GrantGrant Thornton\u2019s chief economist Andrew Webb said Ireland is ‘vulnerable’ to economic shocks. File picture<\/p>\n

He said that while most forecasts point to continued growth through 2026, Ireland is \u201cvulnerable\u201d to shocks.<\/p>\n

Higher-for-longer interest rates, a turn in the global tech or pharma cycle, or \u201ca wobble\u201d in consumer confidence would all bite harder when households and firms are already under cost pressure<\/a>, he said.<\/p>\n

\n If even a handful of multinationals change their tax profile, a big chunk of the exchequer\u2019s income can vanish quickly.\u00a0\n <\/p>\n

“Windfall revenues have boosted Ireland\u2019s coffers, but those receipts are highly concentrated and volatile.\u201d<\/p>\n

Institute of International and European Affairs chief economist Dan O\u2019Brien said he was largely confident about the year ahead, but conceded: \u201cCould things go wrong? Of course they could.<\/p>\n

\u201cThe idea that you\u2019re just going to grow forever, or at least not ever have a recession again, is just not what economic history tells us.<\/p>\n

\u201cThere\u2019s the possibility that if the US decides to do something specific towards Ireland or towards the pharmaceutical sector, that will affect Ireland disproportionately.<\/p>\n

\u201cThere\u2019s absolutely no question the Government has allowed itself to become addicted to corporation tax revenues. That is something that should never have happened.<\/p>\n

\u201cThese are windfall revenues; that is absolutely clear. They may go on for one to five years for sure, but they won\u2019t last forever and we\u2019re not going to be an outlier on it forever.\u201d<\/p>\n

Ireland should have treated corporation tax the way that Norway treats its fossil-fuel tax intake, Mr O\u2019Brien said, running up a much bigger sovereign wealth fund, and not being locked in major infrastructure spending commitments. He said:\u00a0<\/p>\n

\n If that money dries up, we\u2019re going to be in big trouble.\n <\/p>\n

Revenue\u2019s preliminary results showed the exchequer received \u20ac106bn in taxes and duties in 2025. Some \u20ac36.57bn came from income tax, with \u20ac34.66bn coming from corporation tax. US multinationals account for around three quarters of corporation tax, according to Irish Fiscal Advisory Council estimates.<\/p>\n

Independent economist Jim Power, former chief economist at Friends First, told the Irish Examiner: \u201cThe biggest threat to Ireland is our massive concentration risk.<\/p>\n

\n We are just so inordinately dependent on foreign direct investment for corporation tax receipts, for employment, and for general economic activity. That is the big challenge.\n <\/p>\n

“And that\u2019s where a bust in the economy would come from, not from a domestic overheating situation.\u201d<\/p>\n

Greenland could prove to be potentially sticky if Mr Trump dials up the rhetoric on taking over the Danish territory.<\/p>\n

The US president has not backed down from his contention that the US wants Greenland to become US territory.\u00a0<\/p>\n

He has not ruled out using military force if the US decides to plough ahead with the move that would jeopardise the relationship with his allies in Europe and Nato.<\/p>\n

Mr O\u2019Brien said: \u201cWe live in a very unstable world. If Europeans get into some sort of retaliatory situation with the US over Greenland, that would have an impact because Ireland is so plugged into the US economy.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Continued over-reliance on corporate tax receipts from US multinationals remains one of the biggest threats to Ireland\u2019s financial…\n","protected":false},"author":2,"featured_media":281310,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[8139,79,2190,179,18,19,185,17,2554],"class_list":{"0":"post-281309","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-banking","9":"tag-business","10":"tag-cost-of-living","11":"tag-economy","12":"tag-eire","13":"tag-ie","14":"tag-inflation","15":"tag-ireland","16":"tag-pharma"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115883897265665601","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/281309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=281309"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/281309\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/281310"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=281309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=281309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=281309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}