Apple is reported to have opened an office in Luxembourg from which it will manage the iTunes European store.
Luxembourg-based ISP DataCenter is claiming "Apple iTunes has established a company here".
Chairman of Luxembourg's American Chamber of Commerce Paul Schonenberg said: "When he heard of Apple's plans to set up an office in Luxembourg we welcomed Apple's decision and will offer them any assistance in setting up here, and making their staff feel welcome."
Luxembourg is fast becoming first choice companies looking to open operations in Europe, mainly due to its low VAT level.
Macworld is awaiting clarification from Apple.
The magazine for iPod Users