After a three-year investigation, it has concluded that the US firm's Irish tax benefits are illegal.

"Member states cannot give tax benefits to selected companies - this is illegal under EU state aid rules," said Commissioner Margrethe Vestager.

The Commission said Ireland enabled the company to pay substantially less than other businesses, in effect paying a corporate tax rate of no more than 1%.

Ireland and Apple both said they disagreed with the record penalty and would appeal against it.

The ruling had sparked widespread criticism in the US with the US Treasury saying that such tax investigations were "unfair" and undermined the tax rules of individual states.