A number of prominent economists have taken aim at Ireland's corporation tax policies on social media, labelling them "parasitic" and accusing the State of "siphoning" the tax bases of others.
The criticism began on Wednesday when leading French economist, Garbiel Zucman, who is the head of the EU Tax Observatory, posted on the platform X (formerly Twitter) a reference to the recent Global Tax Evasion Report 2024, which he helped co-ordinate.
"Ireland's corporate income tax revenue per capita: €4,500 and rising," wrote Mr Zucman.
"It pays off to siphon off profits from all over the world!" he added, linking to the report, which was published in October and referred to Ireland as a tax haven.
It also claimed Irish-based firms paid an effective corporation tax rate of 7% in 2020, well below the supposed headline rate of 12.5%.
The research also pointed to Ireland and the Netherlands as being the biggest destinations for so-called "profit shifting" by firms.
A day later, on Thursday, the French economist Thomas Piketty, reposted Zucman’s X post.
"Probably the clearest illustration of the fact that nothing serious has been done to fight tax evasion within the EU since 2008: if anything the situation has deteriorated," he declared.
"Ireland is getting an extra month of income by siphoning the tax base of others!"
That was followed by a further reposting of Zucman’s post last night by the former International Monetary Fund (IMF) official, Ashoka Mody, who is now a visiting professor in international economic policy at Princeton University in the US.
"A country I have loved, with astonishing beauty, tradition of beautiful writing and haunting music, deep human capital, insisting on a parasitic tax policy," he wrote on X.
Ashoka Mody is a former IMF mission chief to Ireland.
International criticism of Ireland’s corporation tax regime is not new, but the latest comments come despite the country’s participation in a number of reform agendas facilitated by the Organisation for Economic Co-operation and Development (OECD).
The comments come just days after the Department of Finance revealed a significant bounce back in corporation tax receipts in November, following concerns around a fall-off in recent months.
Just over €6 billion was collected in corporation tax during the month, an increase of €1.3bn - or 27% - on last year.
In a statement the Department of Finance said the Tax Observatory report relies on work that focuses on links between the level of profit booked and the level of wages paid in a country.
"This creates a misleading impression that corporate profits are or should be directly linked to wage levels rather than to the outputs of investment in all income generating activities such as investment in R&D, intangible assets, capital intensive machinery and investment in staff," it said.
"The paper appears to label any such payment as profit shifting which ignores that Ireland has substantive operations with hundreds of thousands of employees working for many of the world's largest Multinational Enterprises who pay the correct level of tax on these profits."
It added that Ireland is home to many of the world’s largest multinational businesses operating in sectors with high level of profitability such as pharma and information and communications technology.
"This results in high financial flows to and from Ireland," it said.
"Ireland continues to take action to ensure the Irish tax code is line with new and emerging international tax standards as agreed globally."
"Ireland is a strong supporter of the BEPS process and has fully implemented both Anti-Tax Avoidance Directives and fully supports the two pillared solution to address the challenges brought about by the digitalisation of the economy."
