Is Apple Expanding In Ireland?

In a report published Tuesday, JP Morgan analyst Rod Hall commented on reports that Apple Inc. (NASDAQ: AAPL) is believed to be exploring a major expansion of its key Irish plant just months after completing a "massive" 300 million euro development.

Apple has operated in Cork, Ireland since 1980 and has grown its workforce to over 4,000 employees that serve customers through sales, distribution, manufacturing, tech support and other critical functions.

Hall noted that Apple's expansion could deliver a multi-million euro boost to the Cork construction sector and generate hundreds of new jobs. The analyst further added that the Cork facility is considered to be Apple's most important office outside of its Cupertino, California home base.

"We estimate that Apple funnels approximately 59 percent of its global profits through its Irish subsidiaries," Hall wrote. "We believe it is likely that this expansion is aimed at increasing Apple's physical presence in Ireland which, in turn, would potentially provide support for Apple's Irish tax position."

Hall referenced a recent 10Q filling in which Apple disclosed that the European Commission will formally investigate Ireland's alleged state aid to the company, specifically the allocation of profits for taxation purposes of the Irish branches of two Apple subsidiaries.

Apple disclosed that under the event of an unfavorable ruling, it could face "material" tax repercussions as the European Commission would require Ireland to recover from Apple past taxes covering a period of up to 10 years.

Apple argued that the assertions are "without merit" while also noting that the company is "unable to estimate the impact."