Friday, May 3, 2024

Ireland’s largest taxpayer motors along

OK, we can’t be 100 per cent sure that Microsoft Ireland Research is Ireland’s largest taxpayer but it certainly is a likely candidate for being so.  The 2023 accounts are now available and like last year continue to paint a strong picture.  Let’s start with the income statement:

From 2019 to 2023, turnover pretty much doubled (after previously doubling from 2017 to 2019).  Operating costs haven’t increased as rapidly with operating profits increasing by around two and a half times since 2019, to reach $23.3 billion.

In recent years, the tax charged in the income statement has been around 12 per cent of operating profit plus net interest income. This continued to be case in 2023.

At $2.9 billion, Microsoft Ireland Research (MIR) is likely responsible for around ten per cent of Ireland’s Corporation Tax revenues and something a little north of two per cent of general government revenue.  MIR has also seen its non-financial footprint increase here in recent years.

In 2023, Microsoft Ireland Research had an average of 1,242 employees and incurred an aggregate of $157.7 million of expenses on wages and salaries.  This gives an implied average of $127,000 per person employed.  In total aggregate staff costs were $234.7 million once PRSI, pension costs and share-based remuneration are factored in.

We are primarily interested in Microsoft Ireland Research because of the size of its tax charge. It does not have the highest amount of Microsoft’s employees in Ireland.  That impact belongs to Microsoft Operations Ireland Limited which had an average of 2,779 persons employed in 2023 (2022: 2,386). 

In 2023, MIOL incurred wages and salaries costs of $340 million at an average of $122,400 per person employed.  On top of that MIOL had a tax charge of $652 million, up from $476 million in 2022.

Combined MIR and MIOL, had a tax charge of $3.5 billion in the twelve months to the year ended June 30th 2023.  Add in $700 million of total staff costs and we’re at $4.2 billion.

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