The Finance Minister Michael Noonan is insisting Ireland is not responsible for collecting taxes from Apple for activities outside the country.

Mr Noonan has accused the European Commission of trying to influence tax policy 'through the back door', after it said there had been illegal state aid and €13bn should now be recouped.

The Government and Apple say they will launch appeals to have the ruling overturned in the European courts.

The Cabinet is meeting tomorrow to discuss the issue.

European officials have spent three years looking at whether Apple channeled all of its European sales through Ireland to benefit from our low corporate tax rates.

Commissioner Margrethe Vestager, in charge of competition policy, said: "Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules.

The European Commission explains how Apple's taxes work | Image: European Commission

"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.

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

Apple CEO Tim Cook meanwhile claims the ruling is "effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been".

Minister Noonan says Ireland is not responsible for collecting all of Apple's taxes.

"The back of my Apple iPhone it says 'Designed in California. Manufactured in China'. So I can't see how the Irish authorities would have a tax liability for economic activity that takes place in other jurisdictions," he told the CNBC.

The United States, meanwhile, has indicated it might seek some of the €13bn that Apple is being forced to pay to Ireland.

This evening the White House press secretary Josh Earnest hinted some of the tax should have been paid in America.

"It's also possible that the kinds of payments that were contemplated by the EU decision today at the end of the day are merely a transfer of revenue from US taxpayers to the EU," he told reporters.