The bill establishes a tax to be paid on dividends if a company has moved to another country where it does not have to pay dividend tax. Due to a threshold above which the tax only has to be paid, the bill actually only affected two companies: Unilever and Shell. Only if they move to a country where they do not have to pay dividend tax, do they have to pay the fine. That threshold has disappeared in the amended proposal.
“These are also companies that have said in the past that they are considering moving to the United Kingdom because of the dividend tax,” says Snels. “I think it’s a bad idea that companies take such big steps just because of avoiding that tax.”
Unilever informed its shareholders this summer that it will put the move to London on hold if the company does indeed receive a departure fine of 11 billion euros.
Criticism from council and industry
The Council of State is very critical of Snels’ original proposal, because it goes against European directives and tax treaties. According to Snels, the council sees it wrong in assuming that the departure fine is a tax on the company Unilever. In that case, his proposal would indeed violate international rules, but he disputes that it is a corporate tax. It quickly finds it a tax for the shareholders and according to him it is allowed, he also clarified in a letter to the Lower House last month.
Previously, there was considerable criticism from the business community that the Netherlands would harm the business climate for companies by law.
Support from government parties
The proposal is not yet off the table in the House of Representatives. “This is a very serious bill,” said D66 MP Van Weyenberg. “If you only go to another country because you no longer want to pay dividend tax, you can pay at the border. I don’t think that’s unreasonable.” Government parties CDA and ChristenUnie are also not abandoning the plan for the time being.
On Monday, Unilever’s British shareholders will vote on the plan to go ahead with the move. Earlier, the owners of the Dutch shares already agreed to the relocation plans.