Shane Ross (Dublin South, Independent)
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3. To ask the Minister for Finance the reason for the spike in corporation tax receipts and the over-performance of €800 million from this source of revenue; if the increase comes from the multinational sector; if he will provide a breakdown of the increase into one-off factors, early payments and delayed rebates and repayments; the timing factors that were involved; the proportion of the increase that was due to improved trading factors; if a single multinational re-booking profits to its Irish division was a significant factor in the unexpected rise; and if he will make a statement on the matter. [40399/15]

Shane Ross (Dublin South, Independent)
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I want to raise the issue of the surge in corporate tax returns at the end of October. The Minister will be aware that the income tax and VAT returns were a little below expectations but the corporate tax returns were far above. Can we have an explanation from the Minister for the over-performance of corporate tax? Can the Minister tell us whether this comes from the multinational sector or whether it is the result of one-off returns or trading activity?

Michael Noonan (Limerick City, Fine Gael)
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The question referred specifically to performance in the month of October. Corporation tax receipts finished the month €806 million ahead of target. A negative amount of €3 million had been profiled in respect of corporation tax receipts in October 2015 because the Revenue Commissioners had forecast repayments of approximately €200 million that would have offset the forecasted level of collection. However, these repayments, which had been identified to the Revenue Commissioners when the monthly profiles were being prepared, did not materialise as expected. This accounts for more than €200 million of the strong over-performance recorded in October. In addition there were also unexpected payments amounting to €350 million from a number of large companies due to better trading conditions while a number of payments totalling €200 million that had been expected in November and December were received in October.

In the year to date, performance in corporation tax receipts has been unexpectedly strong. At the end of October, cumulative receipts amounted to €2 billion or a little under 75% higher than expected and up to €1.8 billion or over 60% year-on-year. I am advised by the Revenue Commissioners that the over-performance is a result of a combination of reasons. For example, approximately half of the €2 billion surplus against profile is attributable to a small number of large multinational companies. The companies involved have advised the Revenue Commissioners that the strong performance in 2015 is primarily associated with improved trading conditions. There are also some positive currency effects but these are not substantial in overall terms. In addition, there are also timing factors. For example, as I have already stated, a number of payments profiled for November and December were received early and a number of large repayments that were scheduled for October are still outstanding. In addition, there were a number of one-off payments amounting to €170 million. As the Deputy may be aware, approximately 80% of corporation tax receipts are received from the multinational sector, with the top ten tax paying groups accounting for more than one third of total corporation tax receipts.

Shane Ross (Dublin South, Independent)
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I thank the Minister for his reply. I am a little puzzled by some of the balance. I gather €550 million was explained. A large amount of this was described as the result of better trading conditions. Does that include a single payment from a multinational that has adjusted it profits somewhat dramatically in recent times? What I am getting at is the fact that if multinationals are adjusting their profits and paying far more than expected to the Exchequer, then we are becoming dependent on the whim of multinationals and the creation of their profits. We know already that these are movable feasts. Will the Minister indicate whether there is a multinational here which has changed its mind, adjusted its profits and, therefore, contributed far more than expected to the Exchequer this year?

Michael Noonan (Limerick City, Fine Gael)
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I cannot get information about particular taxpayers or particular corporations. I have no evidence or briefing to suggest that this comes largely from one source. This is very broad based. I will set out for Deputy Ross the part of my reply that I did not get to. While corporation tax receipts are concentrated in the multinational sector, it should be noted that the improvement is relatively broad based. In this regard, I am advised by the Revenue Commissioners that there has been an increase of more than 20% in the number of companies paying between €100,000 and €5 million up to the end of October this year, as against same period last year. This is reflected in the receipts, which were also up by more than 20% in this category. It is broadly based. It is for trading purposes. Approximately 50 multinationals are in contact over the telephone on a regular basis with the Revenue Commissioners. The group is small. The Revenue can see what is going on. Those involved say they are all trading stronger. That may be due to the decline in the value of the euro. They are trading strongly this year, are making extra profits and they are paying tax on their extra profits.

There may be some element of intellectual property being brought ashore. Again, I cannot identify that but that was one of the purposes of the amendments I moved when we discontinued the practice of residency that facilitated the double Irish arrangement.

Shane Ross (Dublin South, Independent)
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I thank the Minister. He has opened the door a bit further, for which I am grateful. The evidence is clear that the multinationals are the main contributors to the extraordinary spike in corporate tax. The Minister should be worried about the effect of the contribution of multinationals which is making such a significant and material difference to the returns to the Exchequer. I am interested in hearing his view. I wonder is he worried that multinationals may make an enormous and artificial difference to the returns coming to the Exchequer because of their extraordinary ways of creating, manoeuvring and manipulating their profits. The Minister referred to it when he talked about intellectual property offshore. They can have a disproportionate effect on the returns of the Exchequer and the deficit. Does the Minister regard this as a significant development and one he should tackle in a particularly material way?

Michael Noonan (Limerick City, Fine Gael)
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I have read commentary from fairly able people who argue the case as Deputy Ross has argued it. However, when I raise it with the Revenue Commissioners, I am told those theories are not correct. They tell me that the booming economy and the declining exchange rate has brought about a situation where all companies, multinational and indigenous, are trading very profitably. As a result of their profitable trading, they have more profit and pay more tax. The most serious question from my point of view is whether this is a windfall or something that can go into the base for subsequent years. The Revenue Commissioners assure me that this is not windfall and that it can be put into the base for subsequent years because this is the new situation. While that is the advice, we put in a very low percentage increase for corporation tax next year over this year's base when we were constructing the 2016 budget. It is something like 6% or 7%, which is not much more than the growth rate. We need to be prudent about this. However, the Deputy should not be surprised if next year corporation tax again exceeds the estimate for the 2016 budget because we are putting in very prudent figures.

I rely on Revenue to tell me about taxes and to predict tax flows. Revenue is predicting that these tax flows are not windfall and that they will continue into next year and subsequent years in similar trading conditions.