Monday 10 August 2020 2:44 pm

Unilever may abandon HQ unification over €11bn Dutch tax bill

Unilever has said it may scrap plans to unify its London and Dutch headquarters, if parliament in the Netherlands passes a law which would demand an €11bn exit tax over the deal.

The legislation, which was proposed by the opposition Green Left political party, is currently being assessed by the Netherlands’ Council of State as to whether it is in accordance with Dutch and European law.

It is also not clear whether it would win majority support in the Dutch parliament. The Council has yet to provide a date for its decision.

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Unilever said in a filing today that it did not think the Green Left plan was legal, ahead of an extraordinary meeting on 21 September at which the conglomerate’s shareholders will approve the unification.

“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 €11bn, would not be in the best interests of Unilever,” it said.

Unilever’s plan to unite its dual headquarters in Rotterdam and London has been tumultuous, with taxes playing a large part in its decision-making.

Read more: Unilever to end Anglo-Dutch structure to prioritise London base after failed Amsterdam move

The consumer giant, which owns brands such as Marmite, Ben & Jerry’s and PG Tips, had initially decided to unify its two headquarters on its Rotterdam site two years ago.

However it later cancelled those plans after the Dutch government decided to retain a 15 per cent withholding tax on dividends — whereas the UK does not impose such a levy. 

Unilever revealed plans to end its joint Anglo-Dutch structure to unify under its UK listing last month, after failing to persuade British investors of the Rotterdam move.