For years, Apple has based its European operations in Ireland, which maintains some of the lowest corporate taxes in the world.
However, a new ruling by European anti-trust regulators is demanding Apple pay out some 13-billion euros in taxes it claims it's been owed for the past 20-years or so.
Margrethe Vestager is the European Commissioner for Competition.
"Apple's tax benefits in Ireland are illegal. Two tax rulings granted by Ireland have artificially reduced Apple's tax burden for over two decades in breach of EU state aid rules. Apple now has to repay the benefits worth up to 13 billion euros plus interest."
The "selective treatment" in Ireland allowed Apple to pay an effective corporate tax rate of just one percent on its European profits in 2003.
Those taxes were eventually whittled down to just 0.005 percent in 2014.
The EU decision is already being met with a strong condemnation from Apple and from the US government, which both say Ireland's tax scheme is entirely legal.
Margrethe Vestager said the issue is specific to profits generated in Europe and recorded in Europe.
"This is European activities, so it has to do with European taxation, in case, Irish taxation, and it has to do with European state aid rules since it has taken place within the single market. Whatever the issue that Apple may have with the U.S. tax code is not an issue for us."
EU officials say the 13-billion euro assessment could be reduced if other countries sought more tax themselves from the U.S. tech giant.
Apple is not the only U.S. company that finds itself under scrutiny over its European taxes.
According to reports, the EU will likely order other U.S. multinationals including Starbucks, Amazon, and Macdonald's to pay back taxes to the so-called "tax havens" which include Ireland, the Netherlands, Belgium, and Luxemburg.
Those countries would then have to share part of their tax gains with the rest of the European Union.
Under the current EU rules, member countries cannot give incentives that grant companies or sectors an unfair advantage.
