Delphi Automotive plc, whose tax domicile is in the United Kingdom, won an appeal with the Internal Revenue Service and will not pay U.S. taxes on its worldwide profits, the company said in a Securities and Exchange Commission filing Wednesday.

The IRS in June asserted that Delphi and its unit, Delphi Automotive LLP, should be treated as domestic corporations for U.S. federal income tax purposes retroactive to Oct. 6, 2009, and as such, would be subject to U.S. federal income tax on their worldwide taxable income, the company said in its filing.

Delphi contested the conclusions through the IRS’s administrative appeals process, and on April 8, the IRS Office of Appeals concluded that the section of the tax code that the IRS had based its decision on actually did not apply to Delphi, and therefore no adjustments for the tax years in question were necessary.

“Consistent with the IRS’s determination and conclusion related to this matter, Delphi Automotive plc will continue to prepare and file its financial statements and tax filings on the basis of being a U.K. tax resident,” the company wrote.

Delphi, whose c-suite operates from Troy, Mich., would have had to pay hundreds of millions in back taxes had the IRS appeals office ruled otherwise, according to Crain’s Detroit Business. The IRS had wanted Delphi, which in 2009 incorporated in Gillingham, United Kingdom, after emerging from bankruptcy, to be taxed as a U.S. entity due to the supplier’s acquisition of old assets following bankruptcy.

But Delphi won the appeal, because as a U.K. tax resident, Delphi isn’t required to pay U.S. taxes on its sales tied to overseas operations and is only taxed in the U.S. on income related to sales in the U.S.

“The appeal win may be a blow to the IRS, which has sought to curb tax inversion and other methods for corporations to protect profits offshore in recent years,” Crain’s wrote.

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