Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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13. To ask the Minister for Finance for an explanation of the recent spike in corporate tax receipts; the extent to which it is linked to recent changes made in relation to the so-called double Irish and the knowledge box; and if he will make a statement on the matter. [40380/15]

Michael Noonan (Limerick City, Fine Gael)
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Corporation Tax receipts have been unexpectedly strong in 2015. At end-October receipts were just under 74% higher than expected and up by over 60% in year-on-year terms.  

I am advised by the Revenue Commissioners that the over-performance is a result of a combination reasons and that the improvement is relatively broad based with improved receipts in other sectors and sized firms.

As the Deputy may be aware, CT receipts in Ireland are highly concentrated with a high proportion of receipts coming from the multinational sector.  The Department of Finance published a paper (prepared by the Revenue Commissioners) last year on this point. 

The Revenue Commissioners have advised that about half of the increase in CT receipts in 2015 is from a small number of large multinationals and is attributable to a variety of reasons including improved trading conditions, positive currency fluctuations, some timing factors and a number of one-off payments. 

Although CT is concentrated in the multinationals sector, it is important to point out that the improvement is relatively broad based. In this regard, I am further advised by the Revenue Commissioners that there has been an increase in the number of companies paying between €100,000 and €5 million up to the end of October this year by 20% when compared with the same period last year.  This is reflected in the receipts which were also up by over 20% from this category.    

I was very clear last year that the change made to the company residence rules would not, of itself, raise any additional Irish Corporation Tax ('CT').  This change only materially affects companies that typically did not have any substantive Irish operations themselves as their only link with Ireland was the 'label of incorporation', and they therefore are not viewed as Irish for tax purposes.  Such non-resident companies were already taxable in Ireland in respect of any activities undertaken in Ireland through a branch or agency and it was not expected that this would change.  

The Knowledge Development Box (or 'KDB') is contained in the Finance Bill that is currently at Committee Stage in the Dáil.  It will not come into effect until 1 January 2016, so the first impact on CT receipts would not be expected until 2016 and, as per the analysis published by my Department on Budget day, the KDB is expected to result in less CT being paid.