The Republic’s corporation tax revenues could slump if multinationals continue favouring other countries over the Republic for new data centre construction, a leading tech lobby group has warned.Businesses paid €33 billion in corporation tax on their profits to the exchequer last year, the bulk of it from multinationals. Tax windfalls from this revenue source in recent years are helping to fund ambitious Government infrastructure plans.But the State risks losing future corporation taxes as multinationals choose other locations for data centres in a move that could mean they shift other key activities out of the Republic, according to industry group Digital Infrastructure Ireland (DII).Rents and evictions soar as house price inflation slows Listen | 39:34Data centres are under fire here as they consume large amounts of energy. Existing facilities, which are used to support digital activity and transactions, use about one-fifth of the Republic’s electricity.Multinationals use Irish data centres to house much of their intellectual property, which is central to the profits they earn here, and on which they pay corporate tax, says DII in a report it will publish on Wednesday.Those businesses pay “considerable taxation” in jurisdictions where they locate their intellectual property, said the group’s chairman, Maurice Mortell, in advance of publication.“The risk is that if data centres are going to be built in other locations, because they cannot be built in Ireland, the intellectual property assets could follow the data centres, with very negative implications for Irish corporation tax revenues,” warned Mortell.The Republic is “losing business and global companies are moving their investment pipelines elsewhere”, he stressed.Multinationals in the tech, data, pharmaceutical and other industries employ more than 300,000 people in the Republic, and support tens of thousands of other jobs here indirectly, official figures show.A squeeze on energy supplies here has prompted multinationals to bypass the Republic for other European countries when seeking locations for new data centres, the DII report – Digital Infrastructure for the Future We Want – warns.The report, written by economist Jim Power and Amárach Research statistician Gerard O’Neil, argues that high-tech and pharmaceutical corporations here “rely heavily” on intellectual property.“Unlike a building or a machine, it is very easy to move intellectual property into or out of a country,” it says.“There is a lot of intellectual property held in Ireland. Some of it has been produced here, while much is imported between different arms of the same multinational corporation.”Ireland has seen a sharp increase in the amount of data centres in operation in recent years, but are they necessary for economic growth? Video: Enda O'Dowd This contributes significantly to exports, which totalled €279 billion for computer services alone in 2024, the report notes.DII calculates that the technology industry contributed €107.5 billion to the Republic in 2024. Mortell argued that maintaining the Republic as a key European location for overseas investment demanded a national strategy which integrates data centres, energy, planning and industrial policy to support competitiveness. Government announcements must “translate into tangible actions”, he added.