The Irish response
Ireland insists the policy that makes it extremely cheap for Apple to operate and sell its devices in Ireland and the rest of the EU is legal.
The country offers some of the lowest tax rates in the EU. Its economy is booming, and Apple is one of its biggest private employers. Its location in Cork, Ireland brings a reported $17 billion into the Irish economy.
The Irish government may fear the ruling could scare away other investors, which could cost thousands of jobs.
The EU rationale
But the EU argues Apple used shell companies incorporated in Ireland to dodge taxes. It claims Apple paid just 0.005 percent on its international profits in 2014.
Apple CEO Tim Cook called the ruling "obvious targeting." Apple's lawyers claim the EU ignored expert advice in attempts to maximize how much Apple owed.
The U.S. government also condemned the ruling, saying it threatened European investment.
Why did Ireland try this?
Ireland struck the deal in 1991 and has since become a tech hub. Letting Apple flaunt its tax rules was a "sweetheart deal" intended to create jobs, Bloomberg reports.
There were two Apple companies based in Ireland: Apple Sales International and Apple Operations Europe. ASI made yearly payments to Apple to fund research. Those payments weren't taxable, so the EU missed out on billions in tax dollars every year. Most AOE profits were allocated to a "head office" that didn't employ anyone.