Apple And Ireland Taxes: Company Moves Entire International iTunes Business To Ireland

Apple is packing its bags. The technology firm is moving its international iTunes business from its current headquarters in Luxembourg to Ireland at the start of February, according to a report from Ars Technica.

The move marks Apple following through on an announcement the company made back in September 2016. At the time, the Cupertino company shifted an estimated $9 billion of iTunes assets to the island nation. It also moved all developer contracts to Apple Distribution International, one of its Irish entities.

Starting Feb. 5,, according to a note sent to developers, the entirety of Apple’s non-U.S. iTunes operation will operate out of its European headquarters in Cork, Ireland. Included in the business is the iTunes Store, Apple Music, the App Store and the iBooks Store.

Once the iTunes operation takes root in Cork, it will mark an expansion of Apple’s core business in Ireland. The company already employs about 5,500 people in the city of Cork and announced last year a plan to expand its existing operation by up to 1,000 jobs over an 18-month period.

The company is the largest private employer in Cork—Ireland’s second-largest city—and economists estimate Apple’s operations in Ireland generate around $24 billion annually in salaries, taxes and investment.

While Apple’s move came with plenty of warning, it’s possible to view it as a slight to European Union officials given the tenuous relationship the technology firm has had with regulators over its operations in Ireland.

The issue stems from Ireland’s extremely generous corporate tax structure. The country levies a 12.5 percent tax on corporations operating within its borders, compared to a 35 percent corporate tax in the United States.

Apple landed an even more generous deal with Ireland in exchange for headquartering the European branch of its company in the country. The agreement allows Apple to sell its products with a tax of lower than one percent, and because Apple runs its sales throughout Europe through its Ireland headquarters, most of its sales in the region are barely taxed.

In August, the EU found Ireland had been granting illegal tax benefits to Apple, which enabled it to pay substantially less in taxes than its competitors and other businesses—a practice that, by the EU’s account, had been going on for many years. As a result, Apple was required to pay an additional $13.5 billion in taxes, and Ireland was ordered by the EU to collect those fees.

Apple voiced its objection to the ruling, arguing it paid all the taxes required of it, and vowed to appeal. In December 2016, Ireland announced its plan to appeal the EU’s push for the country to start collecting from Apple and accused the EU of violating its sovereignty.