The outgoing cabinet is trying to get support from the House of Representatives to abolish the dividend tax after all. Ministers Stef Blok (VVD, Economic Affairs and Climate) and Hans Vijlbrief (D66, Finance) hope to keep Shell in the Netherlands this way. Sources around the cabinet confirm this NRC. The parliamentary parties of GroenLinks and the PvdA have been approached whether they want to support an abolition.
On Monday morning, the British-Dutch oil and gas company Shell announced that it would move its headquarters to the United Kingdom. Outgoing minister Blok said he was “unpleasantly surprised” by the decision. The cabinet was informed by Shell on Sunday.
Vijlbrief and Blok then went in search of opportunities to retain Shell. The government argues that the politically controversial abolition of the dividend tax could help. If this is finalized before the Shell shareholders’ meeting, which is scheduled for December 10, the cabinet could still influence the decision.
It is not easy: the cabinet is outgoing and the measure is sensitive in the House of Representatives, including in the coalition. Moreover, the cabinet does not have a majority in the Senate. “If we want to do something, we have to consult,” says one person involved. Both the PvdA and GroenLinks, previously themselves in the picture as potential coalition partners, could have helped the coalition parties gain a majority in the senate with their seats.
Left parties are against
At the same time, the rapprochement attempt is striking, because the two left-wing parties previously strongly opposed an abolition of the dividend tax. On Monday, GroenLinks launched its own plan that should make Shell shareholders change their mind: a ‘relocation fine’. Such a departure tax could amount to several billion at Shell.
Rutte III waived it
Shell wants to simplify its share structure by continuing as a British company. Dividend tax played a major role in that decision, Shell CEO Ben van Beurden said Monday on The Financial Times know. In 2005 Shell chose to become a British company headquartered in the Netherlands. “Then it was expected, also expressed by the government, that the dividend tax in the Netherlands would eventually disappear,” said Van Beurden in the FD. In 2005, the then State Secretary for Finance, Joop Wijn (CDA) said in a debate with the House that he saw “no future” for the dividend tax. “The signal to the business community may be that we do not see this tax survive in the long term.”
The plan of the Rutte III cabinet was initially to abolish the dividend tax. British-Dutch companies in particular, such as Shell, could be retained in this way. There is no dividend withholding tax in the United Kingdom. That is why the Rutte III cabinet announced the abolition of the dividend tax in 2017 in the coalition agreement, which immediately came under a storm of criticism for the cabinet and the coalition. The cabinet therefore withdrew the proposed abolition.
After Unilever, also Anglo-Dutch Unilever, decided to opt for the United Kingdom in 2018, Rutte III dropped the plan.
Listen here this episode of The Hague Affairs from 2018 explaining the dividend tax
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