Brad Setser has spent his career following the money. A senior fellow with the Council on Foreign Relations and a deputy assistant secretary with the US Treasury with responsibility for international economic analysis, Setser is a specialist in international taxation. He spends his time tracking where companies pay their corporation tax, and how much they actually pay.

I spoke with him back in 2019 after US firms repatriated $137 billion in past profits from Ireland following Donald Trump’s tax changes. More recently, however, he has been analysing the dramatic rise in Irish corporation tax receipts, which came in at €22,643 million last year.

“Ireland’s corporate tax revenue has more than doubled since 2019 – sadly, facilitating corporate tax avoidance still pays off,” he wrote on Twitter last week, adding: “Ireland also really, really won when the OECD forced Ireland to get rid of the double Irish.”

It all begs a question: Has Ireland found a new source of gold, or is the country still finding a new way to help multinationals to minimise their tax bills?

The answer is both, as illustrated in two stories by Thomas in the past week. His analysis of the record €22.6 billion corporation tax take last year confirms the goverment forecast that, although the Department of finance now regards almost half of this revenue as a “windfall” that cannot be reliably budgeted for, it won’t drop this year.

Vat transactions with Europe and redundancy announcements by technology multinationals – most recently Salesforce and Amazon – show that the volume of digital business and associated taxable profits located in Ireland by US firms is correcting at much higher levels than before the pandemic. Some may see a fall in profit in the short term, but this is more than compensated by the expiry of tax deductions generated from intellectual property onshoring completed in the previous decade by early adopters of the so-called green jersey, Irish-based structure, like Apple and Microsoft.

Then there are all the soaring profits from the continually expanding pharmaceutical and medical devices industry to be taxed in Ireland as well.

Thomas’s second story, covering the latest financial information from the Nasdaq-listed semiconductor manufacturer Microchip, indicates that in some cases at least, Setser’s accusation that Ireland helps corporations shelter profits from tax that would otherwise be owed elsewhere is valid. Of $5 billion in international sales declared here, so much trickled back to other group companies outside Ireland in the form of intercompany debt interest, payments for technology and dividends that it is impossible to assess the true profitability of Microchip’s Irish operation. It paid $64 million in corporation tax in 2021. 

Yet what is clear is that the group’s presence in Ireland is associated with a holding structure in Malta, where Irish-registered companies claimed residency and paid just $2 million out of $134 million in profits. When all was said and done, Microchip’s head office in Arizona reported that its effective tax rate was 13.3 per cent, much lower than the US federal rate of 21 per cent. And it officially thanked Ireland for it. 


Elsewhere last week, Stephen looked at the issue of inflation. In his analysis, inflation has peaked and it will fall rapidly in 2023. A Stephen put it, “inflation is fundamentally the outcome of a deep distributional conflict between firms, workers, and taxpayers. It is the job of central banks to moderate that conflict without causing recessions”. 

Start-up founders and their investors dread down rounds – fundraises in which the start-up’s valuation drops from the previous funding round. How likely are down rounds this year? John Collins talked to the experts to canvass their view.

Sinead looked at ChatGPT. While she is not convinced that the artificial intelligence chatbot is going to be writing The Currency opinion pieces anytime soon, she thinks that it has an extraordinary ability to put some people out of jobs pretty quickly: entry-level software engineers.

The volume of property sale listings has recovered by about 40 per cent over the course of 2021 and 2022, leaving it nationally only about 5 per cent shy of its pre-Covid total. But as various trends over recent years suggest, the picture looks very different around the country, Ronan wrote

Reits everywhere have been clobbered by rising interest rates. In Ireland, they are unsure of their welcome. Last week, Sean asked: What’s their role in our system, and what’s coming this year?