The Irish government faces a strange problem, particularly seen in France: by presenting its 2025 budget, Tuesday 1er October, he must decide how to spend… his surplus. Not only does Dublin not have a deficit, it is brimming with tax revenue. This year, the surplus is expected to reach around 9 billion euros, or around 3% of gross domestic product (GDP).
And we must also add to this manna an extraordinary gift falling from heaven. On September 10, the Court of Justice of the European Union ultimately ordered Apple to pay Ireland 13 billion euros in tax arrears. Including the interest accumulated since the start of the trial in 2016, this represents the equivalent of 14% of the state budget.
Unsurprisingly, this influx of money is causing a multiplication of demands, especially as legislative elections are expected in the coming months – perhaps as early as November. Sinn Fein, the leading 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 to the tune of 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, revenues could reach 30 billion euros, almost a tripling since 2019, with half paid by just ten companies. This represents almost a third of all Irish tax revenue; in France, corporate tax only accounts for 12% of revenue.
The problem is that this spectacular success comes in part from money “diverted” from the rest of Europe. Tax Justice Network, an association fighting tax evasion, calculates for The World that multinationals artificially transferred $130 billion in profits (116.5 billion euros) to Ireland in 2021. Enough to lose 32 billion dollars in tax revenue to other countries of the European Union (EU), including 3.3 billion to France.
Conversely, 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 in revenue lost across the rest of the European Union.”details Alison Schultz, who carried out these calculations.
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Source: Lemonde
