On 22 February 2011, the European Commission launched a public consultation on the taxation of the financial sector, to receive feedback on the ideas set out in the Commission’s Communication published on 7 October 2010. The Commission would like to collect views from market participants, regulators, social partners, NGOs and other stakeholders on the impact and feasibility of the various policy options, the potential design of the tax and possible problems. The problems identified regarding the issue by the European Commission are as follows:
* Substantial public financing support during the crisis, need for fiscal consolidation and possible under-taxation of the financial sector;
* Undesirable behaviours for the society as a whole (systemic risks); and
* Uncoordinated patchwork of national measures may:
– create incentives for tax-driven relocation either within the EU or outside the EU and distortion of competition; and
– create situations of unrelieved juridical double taxation or non-taxation
The public consultation will be open for contributions until 19 April 2011. Comments may be submitted online.