The Health Services Executive has said it made a €22.4m payment to the Revenue Commissioners in August for underpaid taxes covering the years 2011-2013.
HSE Director General Tony O'Brien told the Public Accounts Committee that it was a full and final payment of underpaid taxes, including penalties and interest, accepted by Revenue.
The HSE is also finalising an internal tax review for 2014 with Revenue, which is expected to conclude next month.
It said that broadly similar issues arose in 2014 and improvements will start to be seen in the financial year 2015.
The HSE told the committee that this was not a tax default or tax settlement.
Mr O'Brien said with a workforce of 100,000 the annual tax bill was in the region of €1.6bn.
He also told the committee that last year's funding allocation of €11.5bn amounted to a reduction of €272m.
"In order to maintain existing levels of service, continue to improve patient safety and deliver priority service initiatives within the funding available, significant budget and expenditure reductions were required," he said.
Mr O'Brien said despite cost savings, it was not possible to realise the required amounts in full and a supplementary estimate of €680m was approved by the Dáil in December 2014.
On procurement, he said the HSE now pays suppliers on average within 28 days.
Mr O'Brien also defended his decision to go on a trip to a European conference in Madrid recently, with the flights, transport and accommodation paid by a supplier to the HSE.
He told the committee that he attended and spoke at the conference and rather than have the taxpayer foot the bill, felt it reasonable that the organisers would do so. He said it was not a holiday.
Comptroller and Auditor General Seamus McCarthy informed the committee that HSE spending in 2014 amounted to €13.54bn, around €585m more than the original estimate.
A supplementary estimate was required for the budget overrun amounting to €680m.
Mr McCarthy said there was uncertainty in hospitals around new legislation relating to charges for privately-insured patients.
He said delays in collecting income from private patients was a cost to the Exchequer and the outstanding private patient debt level was €290m.
Expenditure on high tech drugs was 485m in 2014, a 50% rise compared to 2009.
While payments to pharmacists remained stable at €17m a year, payments to drugs suppliers rose from €315m in 2009 to €468m in 2014, he added.
Committee 'concerned' over value for money
Separately, PAC Chairman John McGuinness has said the lack of a proper reporting system within the HSE has led to a poor management of budgets and overspending.
Speaking on RTÉ's Morning Ireland, Mr McGuinness said already in 2015 budgets have overrun by €350m and it could possibly run to €1bn this year.
"We need to establish how budgets are set and how these overruns are occurring year on year. We are talking significant accounts of money that they [the HSE] are finding it difficult to manage across the organisation."
He said failing to go to procurement and getting value for money is something the committee is deeply concerned about.
He added that any organisation that spends €13.5bn needs a computerised system and being told it is five to 10 years before such a system can be rolled out is absurd.
"You would not find that in any business in the world that spends that kind of money. It is down to the poor management of systems that allow this to happen," he added.
