On November 15, 2021, Shell announced that it seeks approval shareholder approval to simplify its corporate structure and that it intends to move its tax residency to the UK. So what has happened since then?
As we reported on the November 15, 2021 media reports surfaced that the current Dutch caretaker cabinet was trying to find a majority in the Dutch parliament to abolish the Dutch dividend withholding tax. It looks like the Dutch caretaker cabinet has been unsuccessful in finding such majority.
The pending law proposal for an exit tax
Another direct consequence of Shell’s announced seems to be that the GroenLinks delegation has filed a proposal to amend its pending law proposal to intoduce an exit tax/the conditionally levying of an exit dividend withholding tax if a partnership moves it tax residency out of the Netherlands (Voorstel van wet van het lid Snels tot wijziging van de Wet op de dividendbelasting 1965 en enige andere belastingwetten in verband met de invoering van een conditionele eindafrekening (Spoedwet conditionele eindafrekening)) by adding a clause that arranges retroactive force to the law proposal.
Shell isn’t the first multinational that considers to move the tax residency of its headquarters to the UK. Already in 2020 Unilever announced its intention to move the tax residency of its headquarter from the Netherlands to the UK (and ultimately it did). As a reaction to the announcement of Unilever, on July 10, 2020 Mr Snels a member of the GroenLinks delegation in the Dutch House of Representatives filed the aforementioned law proposal to introduce an exit tax/the conditionally levying of an exit dividend withholding tax if a partnership moves it tax residency out of the Netherlands. Conditionally since under the law proposal not in all cases such exit dividend withholding tax is due.
The initial law proposal contained a clause that arranged that the law proposal would have retroactive force until July 10, 2020, 12.00 CET. On September 18, 2020 the initial law proposal was amended in such way that date to which the law proposal would have reatroactive force was changed to September 18, 2020, 12.00 CET.
On October 26, 2021 the law proposal was amended again. This amendment arranged that the clause that arranged the retroactive force of the law proposal was fully stricken from the law proposal.
On November 15, 2021 Mr. van der Lee also a Member of the GroenLinks delegation in the Dutch House of representatives filed a new proposal to amend the still pending law proposal to introduce an exit tax/the conditionally levying of an exit dividend withholding tax if a partnership moves it tax residency out of the Netherlands. This latter amendment contains a proposal to reintroduce a clause that arranges that the initial law proposal will have retroactive force if it comes into force. The most recent amendment would arrange retroactive force until November 15, 2021, 15.00 CET.
NB Mr. Snels left the Dutch House of Representatives as per October 26, 2021. That was as per that date Mr. van der Lee took over the defending of the pending law proposal as per that date.
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