Taxes on Capital in the Republic of Ireland

Taxes on capital are an important part of government revenue in the Republic of Ireland. More broadly, capital taxes have implications for relative competitiveness, revenue sufficiency and equity.


In this inbrief, I investigate the role capital taxes play in revenues relative to other similarly developed European comparators. I then move to an exploration of the components of capital tax revenues. I find that, in aggregate terms, levied capital taxes per capita are very close to the peer-weighted average and constitute a comparatively large portion of aggregate revenues due to the comparatively low total tax take in the Republic of Ireland. Decomposing capital taxes, I show that disproportionate taxes on corporate income mask relative deficits in all other subcategories, particular under the subcategories of tax on Income of self-employed and Stock of Capital. The latter subcategory encompasses many taxes that the OECD classifies as both pro-growth and pro-equity. Thus, increased revenues in these areas could reduce inequality and address expenditure shortfalls in a growth friendly manner

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