Unilever would scrap HQ move if Dutch ‘exit tax’ law enacted

August 10, 2020

AMSTERDAM (Reuters) – Anglo-Dutch consumer goods company Unilever <ULVR.L> <UNA.AS> said in a filing on Monday 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 euros ($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 euros, would not be in the best interests of Unilever,” it said.

The remarks were published on Monday as part of a shareholders’ circular ahead of a Sept. 21 extraordinary meeting in Rotterdam to approve the unification.

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.

($1 = 0.8503 euros)

(Reporting by Toby Sterling; editing by Barbara Lewis)