The Apple story in Ireland continues to bubble along beneath the surface and in the last few weeks I have heard what are called social commentators and "experts" predict that the company will up stumps and head off home. The reasoning is the combined effect of Trump and the EU.
But a major operation like Hollyhill in Cork doesn't simply pull the tent pegs and beetle off overnight. If there be any truth in the 'expert' opinions then the place would shrink section by section in an orderly fashion before finally turning off the lights for good. It could take a year or two for an orderly retreat like that. There's the iStore up there where products are bought over IP and then there's after-sales service, a related but different section. They have a large Applecare section too, some manufacturing modules, a big Finance section and a large admin. outfit to consider. It would take one of these sections to signal closure before I'd begin to worry, no matter what the experts are bleating about.
Last September the Irish Times reported, "Apple to relocate international iTunes business to Cork." Now iTunes is huge with an estimated asset value of €9bn in its own right. At the time I remember thinking that it was a mis-report and that if iTunes were to come to this shore it would be housed in the planned new data centre in Galway, announced earlier. Then "Apple Insider" broke the real story on the weekend.
"Apple has assigned a definitive date to the planned relocation of its international iTunes assets, saying the iTunes Store, Apple Music, the App Store and iBooks Store businesses will make the transition to Cork, Ireland, in early February," they report. They added that, "The official relocation timeline was disclosed in a note sent out to developers on Thursday. Apple Distribution International will conduct the transfer of its international iTunes business, which serves more than 100 countries, from Luxembourg to Cork on Feb. 5, Apple says.
Well let's see now. Luxembourg, where the iTunes Store has been housed since 2004, is an EU country so access to the market is not the motive behind this. The little landlocked country has being doing very well thank you from hosting iTunes as it collects the Luxembourg VAT rate applied to every iTunes sale to all 100 countries. Soon they will lose that to Cork. But here's where it gets interesting. Luxembourg charge a standard rate of 17 per cent VAT while the Irish rate is 23 per cent. There is no contest now as to who gets the VAT money and the full amount of it at that. It will also bring hundreds of jobs and there are implications also for increased corporation tax for Ireland. All-in-all it's a good news story for us and those who question Apple's commitment to Ireland had better look again. Remember too that Apple is the big brother of so many other of our foreign companies here and what it does tends to be copied.
Apple Insider again confirms the story here. "Apple continues to expand its operations in Ireland, despite ongoing criticism of its presence there for tax purposes, with the company's international iTunes business now setting up shop in Holyhill. In all, some $9 billion in assets have been moved from Luxembourg to Ireland, according to The Business Post. The shift is expected to net Ireland tens of millions of euro in value-added taxes," it reports among other things.
Now does that sound like an operation winding down to pull out?