Multinationals Choosing Other Countries for Data Centres Threatens Irish Corporation Tax Revenues
A tech lobby group warns that Ireland's corporation tax revenues, largely from multinationals, are at risk if companies build new data centres elsewhere. This could lead to intellectual property and other key activities leaving the Republic, impacting the €33 billion in tax paid last year. A national strategy is needed to maintain competitiveness and secure future investment.
Ireland's corporation tax revenues, largely from multinationals, could decline if these companies continue to favor other countries for new data centre construction. Last year, businesses paid €33 billion in corporation tax, funding significant government infrastructure plans. However, Digital Infrastructure Ireland (DII) warns that losing data centre investments could lead multinationals to shift other key activities and intellectual property (IP) out of Ireland, impacting future tax income.
Data centres are crucial for multinationals housing their IP in Ireland, which is central to their profits and corporate tax payments. DII Chairman Maurice Mortell stated that if data centres are built elsewhere due due to energy supply constraints in Ireland, IP assets could follow, negatively affecting Irish corporation tax revenues. The Republic is already losing business as global companies move investments elsewhere.
Multinationals in tech, data, pharma, and other sectors employ over 300,000 people in Ireland and indirectly support thousands more. The DII report, authored by economist Jim Power and statistician Gerard O’Neil, highlights that high-tech and pharmaceutical corporations heavily rely on IP, which is easily movable. This IP significantly contributes to exports, with computer services alone totaling €279 billion in 2024. The technology industry contributed €107.5 billion to Ireland in 2024.
Mortell emphasized the need for a national strategy integrating data centres, energy, planning, and industrial policy to maintain Ireland's competitiveness for overseas investment. He urged that government announcements must translate into tangible actions.