The European Commission has ordered Apple to pay $14.5 billion in back-taxes to the Irish government after it deemed the country's tax benefits arrangement to be illegal.

The Commission found that two tax rulings issued by Ireland to the company since 1991 have "substantially and artificially lowered the tax paid by Apple".

This means the Irish government has been giving Apple reduced taxes for the last 25 years.

Selective treatment

A press release from the Commission stated that the tax treatment in Ireland "enabled Apple to avoid taxation on almost all profits generated by sales of Apple products in the entire EU Single Market".

Due to EU rules however, the Commission can only order the recovery of illegal state aid for a ten-year period preceding its request for information in 2013.

This has resulted in Ireland being ordered to recover the unpaid taxes from Apple for the years 2003 to 2014 - plus interest.

"The Commission's investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years," said Commissioner Margrethe Vestager.

"In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."

"Disagree profoundly"

In a statement to the BBC, Ireland's finance minister Michael Noonan said it will appeal the decision.

"I disagree profoundly with the Commission," said Noonan.

"The decision leaves me with no choice but to seek cabinet approval to appeal. This is necessary to defend the integrity of our tax system; to provide tax certainty to business; and to challenge the encroachment of EU state aid rules into the sovereign member state competence of taxation."