The Irish government faces a strange problem, particularly visible in France: when presenting its budget for 2025, on Tuesday 1Ahem October, you must decide how to spend… your surplus. Dublin not only has no deficit, but is overflowing with tax revenue. This year, the surplus is expected to reach around €9 billion, or around 3% of gross domestic product (GDP).
And to this manna we must also add an extraordinary gift that falls from heaven. On September 10, the European Court of Justice finally ordered Apple to pay Ireland €13 billion in back taxes. Including interest accrued since the start of the trial in 2016, this represents the equivalent of 14% of the state budget.
It is not surprising that this influx of money is causing a multiplication of demands, especially since legislative elections are expected in the coming months, perhaps as early as November. Sinn Fein, the main opposition party, for example, calls for massive investment in housing. The Minister of Finance, Jack Chambers, for his part, promises that each worker will benefit from the budget with 1,000 euros per person.
The origin of this surplus
On the other hand, political debates carefully avoid mentioning the origin of this surplus: corporate taxes, mainly those of American multinationals. In 2024, revenue could reach 30 billion euros, almost triple that of 2019, and half would be paid by just ten companies. This represents almost a third of all Irish tax revenue; In France, corporate tax only represents 12% of income.
The problem is that this spectacular success comes in part from money “diverted” from the rest of Europe. Tax Justice Network, an association that fights tax evasion, estimates the world that multinationals artificially transferred $130 billion in profits (€116.5 billion) to Ireland in 2021. Enough to lose $32 billion in tax revenue to other European Union (EU) countries, including 3.3 billion dollars to France.
On the contrary, taking advantage of lower taxes, multinationals only pay $13 billion in taxes on these profits transferred to Ireland. “This means that for every dollar of tax revenue gained by Ireland, it costs $2.50 of revenue lost to the rest of the European Union.”details Alison Schultz, who performed these calculations.
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