Mr. Seamus Coffey:

They remain unexplained but we can, perhaps, identify some things to which they are not related. The aircraft leasing and IP onshoring we have seen in recent years are not drivers of the increase in corporation tax that has taken place. Some links have been drawn between the two but while the aircraft leasing sector pays some corporation tax, it is not of the scale that we have seen. The amount of additional corporation tax linked to the onshoring of IP in recent years is close to zero. There may be payments in the future but they remain at zero currently.

Deputy Lisa Chambers mentioned that the top ten account for a significant amount. What is also the case is that there is significant movement - under the bonnet, as it were - within the figures. The Revenue Commissioners are giving us lots of good information on what is happening but we would always like more. One thing the information shows is that the top ten change from year to year. Certain companies drop out and make lower payments and are replaced by other companies making higher payments. It is not the same top ten every year. We can take it that most of the top ten are foreign-owned but the share is significant.

As to how we can explain the increase in corporation tax, one way to do so is look at a comparison across other EU countries. Other countries have experienced significant rises. Since 2011 and 2012, corporation tax receipts in Germany and France have doubled. That may be comparable to what we have seen here. Some of it could be a fallout from the end of the economic crisis, although our doubling took place in a shorter period and receipts have more than doubled. Those countries have shown steady increases. We had a bounce in 2015 and another bounce in 2018.

Moving away from the IFAC view to a personal one, we have not tried to explain why it has happened but it is possible that the nature and the type of companies in Ireland is playing a significant role. If one looks at the type of foreign direct investment we attract, it tends to involve large and successful companies. If companies are large and loss-making, there are limited advantages in coming to a low tax jurisdiction. If a company is likely to generate losses, it wants to have a high tax rate against which to offset those losses. The companies that tend to be here are large and profitable. It may be that our corporation tax receipts are excessively linked to the international business cycle. As there been an improvement in the position internationally, there is probably a higher elasticity of Irish CT receipts to the global economy. The potential is that if the global economy suffers a downturn and we have that excess elasticity, we could then suffer a much greater drop in our CT receipts.

As Deputy Lisa Chambers stated, the receipts are largely unexplained. It could be down to changes in rules by the OECD or the EU or just the general activities of tax collection agencies around the world, but it does remain a risk.