At 28.2% in 2009, the total tax-to-GDP ratio in Ireland (including social security contributions) is the third lowest in the EU and the second lowest in the euro area. While this ratio has shown an upward trend from 2002 to 2006, it decreased by four percentage points from 2006 to 2009.

The report “Taxation trends in the European Union” noted that Ireland's taxation structure is characterised by a strong reliance on taxes rather than social security contributions. Indirect and direct taxation make up 40.8% and 38.5% of the total revenue in 2009 respectively, whereas PRSI in all its guises raises only 20.7% of total tax revenue. In this regard we differ from the typical tax structure of the EU-27, where indirect taxation, direct taxation and social security each contribute roughly a third of the total.

As in the majority of Member States, the largest share of indirect taxes is constituted by VAT receipts, which provide 55.7% of total indirect taxes (55.2% for the EU-27). The structure of direct taxation is similar to that found in the EU-27. Personal income taxes and corporate income taxes represent 7.9% and 2.5% of GDP, respectively, compared with 8.0% and 2.7% for the EU-27. Social security contributions represent 5.8% of GDP (second lowest in the Union after Denmark), compared to an EU-27 average of 11.1%. Employers’ and employees’ contributions are at 3.3% and 2.3% of GDP, respectively.

For full details of the findings of the report see http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-DU-11-001/EN/KS-DU-11-001-EN.PDF