The surge in corporation tax over recent years means that it now makes up over a quarter of Ireland's total tax revenue, according to the Irish Fiscal Advisory Council.
The organisation said about three quarters of corporation tax is paid by large US multinationals making Ireland’s public finances particularly exposed to changes in US policies.
The Fiscal Council said that the biggest payers of corporation tax had not yet been directly impacted by the new US tariffs as technology and pharmaceutical companies remain exempt for now.
The report said that future corporation tax revenues could be much higher or lower than current levels depending on how US policy evolves.
The report’s author Brian Cronin said some of the changes introduced by the Trump administration "may have temporarily boosted corporation tax receipts."
He added: "But that could change quickly. The US is trying to encourage more manufacturing at home, and it’s also pushing to lower drug prices domestically. Both could reduce the corporation tax paid in Ireland.
He said: "However, there are factors that could increase Ireland’s corporation tax. These include the performance of blockbuster drugs whose active ingredients are made in Ireland. Profits in the tech sector are also rising, driven by advances in artificial intelligence and growing demand for their products and services."
The report said that Ireland is currently producing highly profitable weight-loss and diabetes drugs demand for which is expected to "grow strongly."
The introduction of a minimum 15% tax rate for large companies will also yield additional tax revenue from the middle of next year.
On the downside, it said, potential tariffs and reduced drug prices in the US could make the pharmaceutical sector less profitable.
Tighter regulation in the technology sector could also reduce corporation tax in Ireland.
