In 2024, Ireland booked almost €170 billion in royalty and licence payments as service imports. That figure is equivalent to 58% of Ireland’s modified gross national income (GNI*), which stood at €291 billion last year. These payments did not reflect booming Irish demand for foreign technology or intellectual property. They reveal how multi-jurisdictional corporate groups (MJGs), particularly U.S. tech giants, manage global profits.
This is not trade. It is internal accounting.
The royalty flows in question are classified as imports in official statistics. But these are not payments to unrelated foreign firms. They are intra-group charges—typically from Irish subsidiaries to U.S. parent companies—for the right to use intellectual property that already resides within the same corporate structure. These transactions exist not to procure services, but to shift profits and reduce taxable income.
The rise in royalty payments is striking. In 2012, Ireland reported around €7 billion in royalty imports per quarter. By 2020, the figure had reached €30 billion in Q4. In Q4 2024, it passed €50 billion. Across the year, the total reached almost €170 billion—more than seven times the annual figure recorded just a decade ago.
This shift reflects more than economic activity. It marks a structural change in global profit-shifting. From 2015 onwards, global tax reforms—including the abolition of the “Double Irish” scheme and the U.S. Tax Cuts and Jobs Act of 2017—prompted U.S. multinationals to repatriate intellectual property and restructure their royalty flows. Irish subsidiaries became the main booking centres for global revenues. At the same time, they began paying substantial royalties up the corporate chain, often directly to the U.S.
In national statistics, royalty payments made by Irish subsidiaries to foreign affiliates are counted as imports of services. That’s because they involve payments from an Irish-resident company to an entity abroad — even if both belong to the same multinational group.
As a result, these payments show up in two key places:
- GDP calculations:
Ireland’s GDP is based on the value of goods and services produced domestically, minus what’s imported. So when royalty payments are booked as imports, they subtract from GDP, because they are treated as payments for services “purchased” from abroad. - The current account:
The current account records all trade in goods and services between a country and the rest of the world. Royalty payments are classified as service outflows, which means they appear as money leaving the country — just like paying for foreign consulting or shipping.
The problem is that these royalty payments are not genuine purchases. They are intra-company charges within US multinational corporate groups, not transactions in the open market. So while they are treated statistically like normal imports, they do not reflect real economic exchange, which leads to a distorted picture of Ireland’s economy and trade balance.
Put simply, they are internal transfers between subsidiaries and parent companies, executed for tax optimisation. No new service is exchanged. No third party is involved. What looks like trade is a legal mechanism for reducing corporate tax exposure.
The mismatch between form and substance is not just theoretical. Research from Ana Maria Santacreu and Samuel Moore shows that in 2021, Ireland reported $106 billion in royalty payments to the U.S., while the U.S. recorded receiving just $24 billion. The gap is specific to IP royalties and does not appear in other service categories. It reflects differences in reporting standards, tax treatment, and the opacity of intra-group transactions.
This raises broader questions about the integrity of economic data. Ireland’s royalty imports are correctly recorded under existing rules. But they distort the national accounts by inflating import figures and misrepresenting the nature of Ireland’s external trade. The flows are real in a legal sense. But they do not originate from market-based exchange. They are routed through Ireland for structural reasons, because Ireland is a tax-favoured jurisdiction for intellectual property.
Ireland’s role is not incidental. It is central to how some of the world’s largest companies manage profits. The country offers the infrastructure, the tax treatment, and the legal framework that allow these internal payments to function as deductible costs. The result is a current account shaped less by economic activity than by profit engineering.
None of this is illegal. The firms involved are compliant with both Irish and U.S. law. But when more than half the country’s national income is matched by royalty “imports” that never reflect actual trade, the statistics stop telling us about the economy. They start telling us about accounting.
The payments are booked. The profits are shifted. But if Ireland’s biggest service import is a set of internal charges between affiliates of the same company, it forces us to ask: What exactly are we measuring?
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