Shell faces the threat of a Dutch “exit tax” because the migration system is causing a stir

Shell is threatened by a ruling by Dutch opposition parties after a power company’s decision to stop sharing shares and move taxes in the UK sparked controversy in the Netherlands.

Tom van der Lee, a Dutch green consultant, told the Financial Times he was speeding up the appeal. “exit tax” which was originally designed to sell the Anglo-Dutch Unilever company and billions of euros in fines from the country last year.

The money was first disbursed by the Dutch Green opposition party in 2020 to punish companies that had moved from the Netherlands to areas with lower corporate taxes.

The members’ secret bill has now been revised later Shell Monday announced that it would follow Unilever by abolishing the two-part plan, transferring taxes to the UK, and abolishing “Royal Dutch” in its name.

Van der Lee, Green’s MP who is behind the exit tax, said he had asked the Dutch parliament to discuss the tax before the Shell shareholders’ meeting on December 10.

“Exit tax has been a major political issue for opposition parties since the Shell election,” Van der Lee said. “The federal government should realize that Shell has made up its mind and it will not be possible to keep them in this country.”

The exit taxes are backed by the Greens and the Labor Party but, in particular, need to be supported by the independent Democrats and the Christian Union which can form the next coalition government.

Van der Lee said there was a “window of opportunity” for parliamentary assistance as negotiations for a partnership continued between Prime Minister Mark Rutte’s business support party, Liberal D66 and the left-wing Christian Union. He further added that the ordinance was amended to apply to elections held on November 15 2021 or later, to include Shell.

Critics have ridiculed the idea as a tribute to “Hotel California”, a rental to the Eagles’ song where “you can watch whenever you want, but you can’t leave”. Last year, the Dutch government council ruled that the tax could not be applied to companies that had previously left the country, including Unilever.

Shell claims to have received legal advice and has determined that even if the bill in question was still in force at the time it moved, the group would not face tax liability.

“We looked at a number of technologies from a number of companies, we thought to ourselves and thought it was doubtful that this could be a property tax or a tax we have to pay,” said Andrew Mackenzie, Shell chairman. , he said.

The group argues that such a tax would violate the UK-Netherlands tax code and could be prosecuted under EU law.

It declined to comment on any possible tax increase under the draft law. Unilever estimates in 2020 that it will receive a € 11bn penalty if it becomes law.

Zoe Wyatt, Andersen ‘UK counterpart in the UK, said that while there was uncertainty about how political parties would respond to the bill they wanted, it was reasonable for Shell to “press the button to transfer”. “All the reasons for wanting to leave the Netherlands remain the same and if you want to do so, now is the time.”

The idea of ​​exit taxes was also raised when the Dutch government agreed to a failure in a final test abolishing the seizure tax on the contested party, which Shell cited as one reason for its decision and had already forced it to abolish.

The contest failed after free, green, and middle class parties said they did not agree with the 15% tax cut.

Stef Blok, the Dutch finance minister, told lawmakers Tuesday that the government would not provide any “concrete” means to persuade Shell to stay in the Netherlands. “There has never been a question: if you do not do this, then [we will leave], ”Said councilors.