Overall, November was a strong month for tax receipts, with corporation tax and VAT performing particularly strongly.
A lingering concern will be income tax figures that continue to somewhat disappoint. While ahead of last year, they continue to lag behind forecast despite the surprisingly buoyant jobs data.
Probably the standout figure in November is corporation tax receipts, now up 8.4% on what was a strong 2016. While there is little detail behind the numbers, it is widely expected that strong multinational returns in particular are propping up the numbers.
We don’t expect US tax reform to have a material impact on future corporation tax receipts here. Indeed, it is possible that the US tax changes may even bring forward some of the recent “onshoring” of Intellectual Property, which could have further benefits for Ireland, particularly given the recent trend for IP transfers to be linked to jobs.
VAT receipts are also very encouraging and augur well in advance of the key Christmas sales period for retailers. The positive November VAT figures have brought year to date returns almost in line with forecast.