Unilever Would Scrap HQ Move If Dutch 'Exit Tax' Law Enacted
Published on Aug 11 2020 5:50 AM
Anglo-Dutch consumer goods company Unilever said in a filing that a plan to unify its headquarters in London and scrap its Dutch base might not go ahead - if a law enacting an 'exit tax' in the Netherlands is enacted.
Unilever said the law, if passed, would mean it needs to pay €11 billion ($12.94 billion) to the Dutch government.
It is not clear whether the law, proposed by the opposition Green Left political party, is in accordance with Dutch and European law, or whether it would win majority support in the Dutch parliament.
The Netherlands' Council of State is considering the proposed law and will give an advisory opinion as to whether it is legal. It has not set a date for its decision.
Unilever said it did not think the Green Left plan was legal.
"Nevertheless, if the bill were enacted in its present form, the boards believe that proceeding with unification, if it resulted in an exit tax charge of some €11 billion, would not be in the best interests of Unilever," it said.
The remarks were published on Monday (10 August) as part of a shareholders' circular ahead of a 21 September extraordinary meeting in Rotterdam to approve the unification.
A Pivotal Role
Taxes have played a pivotal role in Unilever's decision-making as it tries to simpify its dual structure: it had initially decided to unify headquarters in Rotterdam, in 2018.
But it cancelled those plans after the Dutch government decided to retain a 15% withholding tax on dividends.
Britain does not impose a withholding tax on dividends.