August Exchequer figures: Corporate Tax receipts fall, but annual trends hold steady
August and September’s exchequer figures are traditionally an important barometer for corporate tax receipts as companies with a December financial year end must file their corporation tax return by 23 September and pay the balance of corporation tax due.
Corporate receipts of €2.1bn for August were down €1.6 billion on the same month last year. Many will have concern this could be due to the looming uncertainty around the potential impact of tariffs on the future business environment; however, it is important to remember last August’s returns were particularly strong for corporate tax receipts as many major firms appeared to pay the balance of tax due for 2023 in August 2024. As result, these August 2024 returns placed us ahead of the full year projections for 2024 at the time. On a year-to-date analysis the 8 months to end August 2025 are almost exactly in line with the same period in 2024 when you omit once off receipts from the CJEU ruling. This does give some comfort to the corporation tax receipts for 2025 being stable in comparison to 2024 and the uncertain global landscape not yet having any significant negative effect.
Despite a slight uptick in the unemployment rate, the country remained at full employment and income tax returns increased marginally by €0.3 billion as a result. While August is traditionally a less significant month than July for VAT receipts, consumer spending remained stable in line with the strong income tax returns and the traditional summer holiday season where we are likely to see an uptick in consumer spending.
The dip in budget surplus is primarily driven by the capital expenditure currently ongoing. Expenditure to date has increased significantly by €6bn on 2024 equivalent which reflects the much needed investment in housing and infrastructure. This is the theme we expect to see repeated in the Budget when it is announced next month
Overall, an Exchequer surplus of €3.2 billion was recorded in August, a decline of €0.6 billion recorded during the same month last year. Despite being marginally ahead of 2024, today’s figures will act as a reminder of the precarious position we find ourselves in ahead of October’s budget. While the government will be hopeful of utilising a budget surplus to fund essential one-off infrastructure projects to encourage large corporates to continue to expand in Ireland, we may see increased calls for a conservative package in the face of global headwinds.
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