The documents published by the Commission last month underline how they are lagging behind on matters of international tax policy. The thought leadership on the taxation of the Financial Services Sector has already been done by the IMF.

Earlier this year, the IMF came down fairly heavily in favour of an activities based tax (a so called FAT) and were more dismissive of a transaction based levy (a so called FTT). The EU Commission is not quite so categoric, not least because it continues to struggle with the issues of VAT on Financial Services. It concludes that the FTT might be a useful global levy, but that a FAT would be of more immediate benefit in terms of revenue raising within Europe.

Further proposals are promised in 2011. The documentation can be found at http://ec.europa.eu/Taxation_customs/resources/documents/taxation/com_2010_0549_en.pdf.