Apple EU Tax Ruling: Ireland Appeals Requirement To Collect Nearly $13.5 Billion In Taxes

Months after the European Union (EU) leveled Apple with a fine for unpaid taxes, the country that has become the iPhone maker’s overseas tax shelter is pushing back against a requirement to collect taxes from Apple, according to a report from the Guardian.

Ireland’s finance department announced on Monday it would appeal the order from the EU to collect up to €13 billion (about $13.5 billion) in taxes from Apple. In its rebuke of the order, the government of Ireland accused the EU of overstepping its boundaries and seeking to violate the country’s sovereignty.

The response comes several months after the EU issued its fine against Apple. European Commissioner for Competition Margrethe Vestager said at the time Ireland had “granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years.”

Apple disagreed with the conclusion of the commissioner, arguing it “follows the law and pays all of the taxes we owe wherever we operate” and vowed to appeal.

The entire issue at hand stems from Ireland’s extremely favorable corporate tax. The country levies a 12.5 percent tax on corporations, compared to a 35 percent corporate tax in the United States.

Apple cut a deal with the country to take an even more generous deal 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. Because Apple completes its sales throughout Europe through its Ireland headquarters most of its sales in the region are barely taxed, generating huge profits for the company.

Apple is the largest private employer in Cork, Ireland’s second-largest city. According to the Guardia n, economists estimate Apple’s operations in the country generate around €19 billion annually in salaries, taxes and investment.