Around €242 billion of accumulated corporation tax losses were available for offset against company profits at the end of 2021.
This represents a significant potential reduction in future corporation tax receipts, of the order of €30 billion, according to the Comptroller and Auditor General (C&AG).
Losses brought forward into 2021 were highly concentrated with just 26 companies accounting for nearly half of the total.
The C&AG's Report on the Accounts of the Public Service 2022 found that the level of corporation tax losses brought forward has been relatively stable over the five years up to 2021.
Losses include trading losses incurred and unused capital allowances for companies engaged in investment.
"Under current legislation, there is no distinction for tax purposes between the portion of a trading loss that is attributable to capital allowances and the portion that is not," the C&AG found.
"Accordingly, the balance between these sources of losses brought forward cannot be readily identified," it added.
It added that recommendations made by the Committee of Public Accounts in 2018 in relation to distinguishing between trading losses and unused capital allowances and performing regular age analyses of losses carried forward have not been implemented.
This is because legislation would need to be changed, Revenue said.
The report recommends that Revenue should introduce a process to investigate instances where significant variations arise between a company’s corporation tax losses carried forward from one year and its losses brought forward in the following year.
It follows three major compliance projects on corporation tax losses undertaken by Revenue since 2019 which have yielded an additional €47m in corporation tax receipts.
"While other compliance exercises, undertaken to reconcile differences arising between the losses forward figure from one year to the losses brought forward in the following year, were able to establish a reason for the discrepancy in the majority of cases, some issues were highlighted," the report said.