European Commissioner Margrethe Vestager has fined 13 billion, plus interest, to Apple. Although the reason is related to an issue of unpaid taxes from Apple to the Irish Government, it is not about tax evasion. Vestager is the Commissioner for competition  (mainly but not only antitrust) not fiscal affairs, and has acted against an illegal "state aid", which in the case took the form of a substantial tax savings granted by the Irish Government to Apple.

There is a connection between tax competition and state aid, but it is not tax competition to be questioned, but an excessive and improper use of it. Tax competition has always been considered, by the predominant neo-liberal thought in Europe, as something positive.  The process of tax competition poses an obstacle to the tax burden in each individual countries, thus to public spending.

Obviously what counts is the competition on capital income, which is the mobile factor par excellence. As for income from labour (except for limited exceptions), and even more so in respect of income from real estate, the issue is much less important. It not by chance that the Irish Government, because of the excesses of its banks, when had to ask for financial aid to the EU, has resisted the insistent requests to increase the 12.5% tax rate on corporate income, and said he was quite ready to increase taxes on workers.

Of course it is not only Ireland to create a semi-tax haven in the EU. Luxembourg, the Netherlands and the UK have also created lighter regimes for financial companies, on income from patents and the like, pushing all the other countries to adopt similar measures. But it is not enough; the logic of tax competition forces the large multinational companies to demand more, and governments to grant.

Especially in countries of small size, very open to international trade, it is convenient to bring to almost zero taxation, in exchange for investments and employment. And this is the case of Apple. But at this point it appears the theme of state aid. In fact the reduction (2% and less) granted to Apple creates an imbalance with all the other companies in Ireland, paying the normal rate of  12.5%.

 The rules on state aid in Europe does not have something similar in US. There antitrust laws have existed for over a century, laws which represented the example of the European rules. But in the EU countries the Commission controls the unfair competition between private companies, but also monitors to prevent distortion by governments, with ad hoc measures in favour of some enterprise, not only from the point of view of competition among companies in different countries, but also among societies within a given country. For example in 2012, the Commission condemned Italy for State-aid, i.e. tax breaks not allowed in favour of ecclesiastical bodies, in the management of schools, clinics and hotels, i.e. economic activities.

The address of the Commission in terms of state aid has long been characterized by increasingly restrictive interpretations, sometimes in an exaggerated way. So Italy was forbidden to apply a reduction of contributions for the workers of companies that produce in the South (Mezzogiorno), allowing only limited relief in the event of increases in employment. So Italy could imitate what Germany did ten years ago, that is to reduce social security contributions by increasing the VAT, for this would be a legitimate tax competition. But an exemption for only part of the territory, however great, is not possible.

It is clear that the tax relief granted by the Irish Government to Apple has all the characteristics to be considered a State aid. The protests of the US government and threats of the Cupertino company have been useless.

And tax competition? Some change of emphasis is occurring, also helped by Brexit, as has always been the United Kingdom that supported with greater insistence tax competition. Twenty years ago the Italian government (Finance Minister Vincenzo Visco) proposed to start a process of harmonization of company taxation, studying how to standardize the rules on the definition of tax bases. Now it seems that the proposal is back on the table of the European Council of Ministers.