Saturday, November 4, 2023

Volatility to the fore in Corporation Tax revenues

For almost a decade now, the year-to-date revenues from Corporation Tax have exceeded the equivalent amount from the previous year (with early 2021 being the only minor exception).  We can see below that the 2023 year-to-date figure for October has dipped below the 2022 line.  The €15.7 billion collected so far in 2023 is €0.4 billion (3%) below the amount collected to October 2022.

Exchequer Corporation Tax Cumulative by Year 2014-2023

We can also see that this is a reversal of the position seen only a few months ago. By July, 2023 was running nearly €2 billion ahead of 2022 (€10.9 billion versus €9.0 billion).  The reversal since means that this year’s Corporation Tax receipts for August, September and October have been around €2.3 billion lower than the equivalent months from last year.

These three months last year saw €7.2 billion of Corporation Tax collected, this year they brought in €4.8 billion - a fall of one-third, which does appear to be dramatic. 

Exchequer Corporation Tax August to October 2009-23

As seen above, this year was still the second-highest on record for these three months but is the fall just volatility that can be expected in such a concentrated revenue source or a harbinger of a more systematic decline?  For the time being volatility seems the more likely landing spot.

To put the recent declines in context we can look at the 12-month rolling sum of receipts.

Exchequer Corporation Tax 12-Month Rolling 2012-2023

The change in direction in the past three months is pretty clear.  November is the most important individual month for Corporation Tax and a one-third drop there relative to November 2022 certainly would be alarming.

The recent falls have put the 12-month sum back close to where it was this time last year, with the annual change in the 12-month sum having plummeted towards zero in recent months. Annual growth rates of 40 per cent plus while exhilarating are not sustainable.

Exchequer Corporation Tax 12-Month Rolling Annual Change

In the 12-months to October 2022, €21.9 billion of Corporation Tax was collected. The 12 months to October 2023 have seen revenues of €22.2 billion – an increase of 1.25 per cent.

To assess the concern that could be raised after the falls in recent months we go back to the Revenue Commissioners guidance on when large companies need to pay their Corporation Tax.

Large companies

Large companies can pay their preliminary CT in two instalments when their accounting period is longer than seven months.

The first instalment is due on the 23rd of the sixth month of the accounting period. The amount due is either:

  • 50% of the CT liability for the previous accounting period
  • 45% of the CT liability for the current accounting period.

The second instalment is due on the 23rd of the eleventh month. This will bring the preliminary tax up to 90% of the final tax due for the current accounting period.

The key months are month six and month 11 of the company’s financial year, by which time 90 per cent of the estimated tax due for the current year must be paid.  Any remaining tax due will be paid when the company files it tax return.

A company must file its return and pay any tax due nine months after the end of the accounting period. The company must make this payment on or before the 23rd of the ninth month.

Clearly any individual month can be any of these deadlines: month six, month 11 or month plus nine.  The likely candidates for the months we are looking at are:

  • August: month 11 for companies with a September year-end
  • September: month +9 for companies with a December year-end
  • October: month 11 for companies with a November year-end


Here are the monthly receipts for August since 2009.  There was an exceptional increase in August 2022 which was up 167 per cent on August 2021.  Some of this was reversed in 2023 but August 2023 was still significantly higher than all years prior to 2022.

Corporation Tax August Receipts 2009-2023

The impact of payment timings can be seen if we combine the receipts for March and August – month six and month 11 for companies with a September year end.

Corporation Tax March and August Receipts 2009-2023

Across the two months of March and August there was no fall at all in 2023.  This points to a company having a large increase in its tax liability in 2022 and paying most of this in August 2022 (when it needed to have 90 per cent of its preliminary tax paid).  For 2023, the payments were more balanced as the March payment would have been based on 50 per cent of the 2022 liability with a smaller amount due in August this year to bring the payments up to the required 90 per cent.

The fall in August 2023 seems mainly volatility due to concentration and the timing of payments.


The fall in September was small which also points to volatility.

Corporation Tax September Receipts 2009-2023

September 2022 was pretty much double September 2021 (€2 billion versus €1 billion). Some of this increase was reversed in 2023 but it is hard to point to anything systematic that might be going on. 

It could just be that companies with December year-ends that filed their 2021 tax returns in September 2022 had more of their final tax payment outstanding than when they filed their 2022 tax returns in September 2023. With lots of companies having December year-ends we can’t point to any company-specific factors but it could be just a general timing issue.


The monthly figures for October seem particularly volatile and it is hard to discern anything that might be going on. 

Corporation Tax October Receipts 2009-2023

There was a local peak in October 2018 of €1.6 billion.  This fell to €1.0 billion in 2019 and pretty much collapsed to just €200 million in 2020.  This put October 2020 as one of the lowest Octobers in the last 15 years. 

There was a strong bounceback in 2021 and a further increase to €2.3 billion in 2022.  Relative to that there was a large fall in 2023, back to €1.3 billion (which was also lower than both 2018 and 2021). 

It is because of this fall in the October receipts that the year-to-date total for 2023 is running behind the 2022 level.  As we have seen, the August fall was offset by a rise in March, and the September fall was pretty modest.  So, the October fall could be significant – if we could link it to something.

We could try to link the October payments to those made the previous May, which are month 11 and month six for companies with November year ends, but that doesn’t reveal a lot.  May is also also month 11 for companies with a June year end.

Corporation Tax May and October Receipts 2009-2023

The monthly receipts for May have actually been pretty stable over the past four years.  This could mean rising payments from companies with June year ends and falling payments from companies with November year ends but there is no way of telling that. 

For companies with November year ends we can see the October (month 11) payments but as noted above, outside of being especially volatile, there is no discernible pattern.  It is possible that a company with a November year end (for the purposes of paying Irish Corporation Tax) has had volatile profits over the last few years and this has likely been driving the volatility in the October Corporation Tax receipts.

This again points to the concentrated and volatile nature of these Corporation Tax receipts with a company-specific factor driving changes in the aggregate figures.  It does not point to a structural shift in the overall pattern of receipts.


November is a month that could be a bell-weather for such structural changes.  It is the most important month for Corporation Tax.  November is month 11 for the most common year-end: December. Last November saw €5 billion of Corporation Tax collected – the highest monthly total ever, and higher than the annual total for 2014. 

The data back to 2009, show a strong relationship between the June and November receipts.

Corporation Tax June and November Predicted 2009-2022

June 2023 was the highest June ever with receipts of €4.3 billion.  If the above relationship holds, this points to record receipts again in November, this time to the tune of €6 billion.

One aggravating factor could be the rise shown above for receipts in August.  August is month 11 for companies with September year ends.  These companies’ tax returns and their final payments will be due nine months later – the following June.

Corporation Tax June Receips 2009-2023

Up to recently, very little Corporation Tax was collected in August (and also in March).  This would translate into very little final tax due the following June.  Now however, the combined receipts for March and August exceed €4 billion.  This can be expected to lead to additional tax payments the following June when companies with September year ends file their tax return and make their final payments. 

The above relationship between June and November was almost exclusively based on the June payments been the first preliminary payments for companies with December year ends so they were a strong predictor of the second preliminary payment in November.  This relationship may no longer be as clear cut as more of the June receipts could be due to companies with September year ends. 

Even with this we would still expect this November’s receipts to be strong. Talk of structural decline in Ireland’s booming Corporation Tax seems premature – for now. But we can certainly expect them to be volatile.