EU TAX RULING 'HELPFUL' FOR IRELAND - A ruling on Finnish tax law made yesterday at the European Court of Justice could have positive implications for Ireland.

A Finnish subsidiary of a British company wanted to transfer money to the UK. Then it tried to claim this as a tax deductible expense in Finland to reduce its Finnish tax bill.

Finnish tax law would not allow this. The company challenged the law in the European Court of Justice, and the court ruled that Finnish law is correct if the restriction is justified by public interest, thus protecting a European country's sovereign right to protect its own tax policy.

Joan O'Connor, incoming president of the Irish Taxation Institute and tax partner at Deloitte, said the decision was a restriction of the freedom of companies. But the court ruled in favour of Finland on the basis of the public interest in protecting its tax base.

She said that if the ruling had gone the company's way, it would have allowed any company to transfer income to a lower tax jurisdiction.

He said the ruling recognised that the 27 EU countries could control their own tax systems and would be 'helpful' for countries who were opposing plans to introduce a common corporate tax base in the EU.


VODAFONE IRISH AVERAGE REVENUE DROPS - Vodafone has just released its accounts for the three months to June. These show Ireland is still in the number one position in terms of Vodafone's profitability from voice and text services.

Vodafone has 2.18 million customers in Ireland, an increase of 10,000. Time spent on the phone in the past three months increased by 8%, but revenue per user was down by 6.9%.

Falling revenues per user on traditional voice and text services have forced mobile operators to branch out into other areas, and Vodafone's mobile broadband service has made 30,000 customers since its launch in eight months ago.

Vodafone Ireland's new chief executive Charles Butterworth said that despite the move into broadband, most of its revenues still came from voice and text, and there were still opportunities in these areas.

Mr Butterworth said Vodafone had no plans to make any further cuts in Irish staff numbers as it had completed a reorganisation.