The Republic’s reliance on foreign-owned multinationals extends “far beyond” corporation tax, with almost a third of the State’s tax and PRSI take now coming from such companies operating in just three sectors, the budgetary watchdog has warned.Multinationals in manufacturing, tech, and financial services provide “high-paying jobs”, which result in “substantial” payroll taxes and social contributions, the Irish Fiscal Advisory Council (Ifac) has said, while their spending on goods and services also generates sizeable VAT receipts.Since 2020, these sectors have been the three biggest corporation taxpayers. In 2024, they paid more than €19 billion in corporation tax, accounting for almost 70 per cent of the total.“That same year, these firms also contributed over €13 billion in payroll taxes and VAT – more than the Government spent on housing and transport combined,” Ifac economist Brian Cronin said.“This reliance on foreign-owned firms in three key sectors has also grown over time. In 2017, these firms accounted for 11 per cent of the total payroll taxes and VAT collected. By 2024, this share had reached 20 per cent.“In other words, €1 out of every €5 collected in income tax, USC, PRSI, and VAT comes from foreign-owned firms in manufacturing, tech and financial services.”He said the scale of the State’s growing reliance on these foreign-owned firms becomes “even clearer” when corporation tax is added. “In 2017, foreign-owned multinationals in manufacturing, tech, and financial services accounted for 16 per cent of all tax and PRSI receipts,” he said. “By 2024, that figure had almost doubled to 29 per cent. In other words, almost €3 in every €10 collected by the State in tax and PRSI now comes from foreign-owned multinationals operating in these three sectors.”Cronin also pointed out that the top 10 corporation taxpayers provide highly-paid and highly-taxed jobs.Has the Irish building sector got themselves hooked on Government subsidies? Listen | 39:58“While the composition of the top 10 may change, these companies are typically large employers,” he said. “Employment in these firms has stayed fairly steady, averaging around 39,000.“Workers in the top 10 corporation taxpayers are paid well above average. In 2025, the average annual income per employment was €119,000, more than three times greater than the national average.”He said payroll taxes amount to about 45 per cent of employment income in the top 10 corporation taxpayers, which is much higher than the national average of 36 per cent.The top 10 corporation taxpayers paid €2.3 billion in payroll taxes last year, which amounted to about 4 per cent of the national total, or €1 in every €25 collected.“What would this mean for a single multinational?” said Cronin. “Consider a hypothetical large multinational operating in the tech sector. Drawing on representative firms, the cost of wages, salaries, and share-based pay could amount to around €160,000 per direct employee. “This could entail tax revenues for an average employee of around €65,000 when considering income tax, employees’ PRSI, and the USC. Adding employers’ PRSI, total payroll taxes could amount to around €80,000.“If the firm were to employ, say, 6,500 workers in Ireland, that would entail a payroll-related tax bill of about €500 million. These estimates do not account for the knock-on impacts on other firms whose business models may depend heavily on the presence of these multinationals.”That being said, Cronin described payroll taxes and VAT associated with foreign multinationals in Ireland as “likely to be less volatile” than the corporation tax they pay. “Many of these firms have made substantial long-term investments in Ireland over several decades,” he said. “In the manufacturing sector, in particular, physical investments in plants would not be easily moved to another jurisdiction.“Ireland is often deeply embedded in their global business models, serving as a base for sales across the EU and other international markets.“These firms are unlikely to significantly scale back activities in Ireland in the short term. But the long-term downside risks are clear. Multinationals could restructure their activities and gradually reduce their footprint in Ireland.”