The Dutch government has launched an eleventh-hour attempt to keep Shell in the Netherlands by seeking to abolish a controversial dividend tax cited by the energy group as a reason to unify its share structure and move its headquarters to the UK.
Officials from the Dutch government told the Financial Times that the caretaker government of Mark Rutte was seeking to find a last-minute parliamentary majority to scrap a 15 per cent withholding tax that has long been a source of complaint for Shell and fellow Anglo-Dutch multinational Unilever.
The political machinations come hours after Shell announced it would end its dual share structure and shift its entire tax base to the UK. The Dutch government said the announcement was an “unwelcome surprise” and is now scrambling to keep Shell from leaving.
Earlier this year, Shell chief executive Ben van Beurden cited the Netherlands’ failure to abolish the dividend tax as a potential reason for leaving the country. The UK is an exception among most European countries by not having a withholding dividend tax.
The 15 per cent tax on Shell’s Dutch A shares in effect restricts share buybacks to its UK B shares, which are subject to no such levy. But Shell’s B share purchases each quarter are capped by regulators at 25 per cent of the average daily trading volume, or roughly $2.5bn.
Under the plans, Shell will still be listed in Amsterdam, London and New York but with a single line of shares, widening the pool to which the 25 per cent cap is applied and so allowing it to boost its buybacks.
Rutte’s coalition government promised in 2017 to scrap the 15 per cent withholding tax to make the country more business-friendly, and encouraged both Unilever and Shell to relocate entirely to the Netherlands.
But the proposal was shelved after sparking political uproar among green and left parties, which objected to the government offering tax favours to multinationals worth about €1.9bn a year. Unilever subsequently announced last year it was moving its headquarters from Rotterdam to London.
Dutch economy minister Stef Blok and tax minister Hans Vijlbrief will address MPs in parliament on Tuesday about their plans to scrap the tax.
Shell has faced other problems in the Netherlands this year. In May, a court in The Hague ordered the company to make bigger and faster cuts to its carbon emissions than it had planned, a ruling against which Shell is appealing. Then last month Dutch pension fund ABP said it was divesting from all fossil fuel companies, including a significant stake in Shell.
The energy group is also under fire from US activist hedge fund Third Point, which after having built a large stake is calling for a split of the company, which it accuses it of being bogged down by an incoherent strategy.
In announcing its planned move on Monday, Shell said it had always intended to simplify its share structure, a legacy of the 2005 merger of Koninklijke Nederlandsche Petroleum Maatschappij and the Shell Transport and Trading Company.
Shell shareholders are set to vote on the company’s planned changes at a general meeting on December 10.
The company did not immediately respond to a request for comment.
Original title seems to have been “Dutch government seeks to scrap dividend tax in bid to keep Shell in the Netherlands”
Which was probably a better/more informative title, but I went with the latest one
One can only hope our dikes prove to be stronger than our politicians’ backbones.
Not a surprise that Rutte and his corporate masters want to use this to cut dividend tax. I can’t imagine there will be a majority for it, last time he proposed it his own party didn’t even support him. It’s a ridiculous plan that will cost 2 billion a year, to save at most a few million hundred.
Edit: as expected, a large majority opposes cutting the dividend tax:
This sub is such a fucking joke at times (well, most of the time really).
The only way we can reverse the decision is if the shareholders vote no and i don’t know how we could accomplish that.
Unless some back room deals are happening as we speak.
Nice, companies like Shell and Unilever can actually pressure tax regulations and then still say no. How long before companies basically run the entire show in our democracy?
So much for the UK racing to the bottom
So we lost the number 2 (Unilever) and number 3 (Shell) of the AEX.
How long until ASML makes the same rational choice?
18 comments
Article:
The Dutch government has launched an eleventh-hour attempt to keep Shell in the Netherlands by seeking to abolish a controversial dividend tax cited by the energy group as a reason to unify its share structure and move its headquarters to the UK.
Officials from the Dutch government told the Financial Times that the caretaker government of Mark Rutte was seeking to find a last-minute parliamentary majority to scrap a 15 per cent withholding tax that has long been a source of complaint for Shell and fellow Anglo-Dutch multinational Unilever.
The political machinations come hours after Shell announced it would end its dual share structure and shift its entire tax base to the UK. The Dutch government said the announcement was an “unwelcome surprise” and is now scrambling to keep Shell from leaving.
Earlier this year, Shell chief executive Ben van Beurden cited the Netherlands’ failure to abolish the dividend tax as a potential reason for leaving the country. The UK is an exception among most European countries by not having a withholding dividend tax.
The 15 per cent tax on Shell’s Dutch A shares in effect restricts share buybacks to its UK B shares, which are subject to no such levy. But Shell’s B share purchases each quarter are capped by regulators at 25 per cent of the average daily trading volume, or roughly $2.5bn.
Under the plans, Shell will still be listed in Amsterdam, London and New York but with a single line of shares, widening the pool to which the 25 per cent cap is applied and so allowing it to boost its buybacks.
Rutte’s coalition government promised in 2017 to scrap the 15 per cent withholding tax to make the country more business-friendly, and encouraged both Unilever and Shell to relocate entirely to the Netherlands.
But the proposal was shelved after sparking political uproar among green and left parties, which objected to the government offering tax favours to multinationals worth about €1.9bn a year. Unilever subsequently announced last year it was moving its headquarters from Rotterdam to London.
Dutch economy minister Stef Blok and tax minister Hans Vijlbrief will address MPs in parliament on Tuesday about their plans to scrap the tax.
Shell has faced other problems in the Netherlands this year. In May, a court in The Hague ordered the company to make bigger and faster cuts to its carbon emissions than it had planned, a ruling against which Shell is appealing. Then last month Dutch pension fund ABP said it was divesting from all fossil fuel companies, including a significant stake in Shell.
The energy group is also under fire from US activist hedge fund Third Point, which after having built a large stake is calling for a split of the company, which it accuses it of being bogged down by an incoherent strategy.
In announcing its planned move on Monday, Shell said it had always intended to simplify its share structure, a legacy of the 2005 merger of Koninklijke Nederlandsche Petroleum Maatschappij and the Shell Transport and Trading Company.
Shell shareholders are set to vote on the company’s planned changes at a general meeting on December 10.
The company did not immediately respond to a request for comment.
Original title seems to have been “Dutch government seeks to scrap dividend tax in bid to keep Shell in the Netherlands”
Which was probably a better/more informative title, but I went with the latest one
One can only hope our dikes prove to be stronger than our politicians’ backbones.
Not a surprise that Rutte and his corporate masters want to use this to cut dividend tax. I can’t imagine there will be a majority for it, last time he proposed it his own party didn’t even support him. It’s a ridiculous plan that will cost 2 billion a year, to save at most a few million hundred.
Edit: as expected, a large majority opposes cutting the dividend tax:
https://www.ad.nl/politiek/kabinet-faalt-met-wanhoopspoging-om-alsnog-dividendbelasting-af-te-schaffen~a0991e51/
bit late now, the shareholder resolution has been tabled
Makes the top comments [in this thread](https://www.reddit.com/r/europe/comments/qubsz6/shell_plans_to_become_100_british_and_move_its/) all the more entertaining.
This sub is such a fucking joke at times (well, most of the time really).
The only way we can reverse the decision is if the shareholders vote no and i don’t know how we could accomplish that.
Unless some back room deals are happening as we speak.
Nice, companies like Shell and Unilever can actually pressure tax regulations and then still say no. How long before companies basically run the entire show in our democracy?
So much for the UK racing to the bottom
So we lost the number 2 (Unilever) and number 3 (Shell) of the AEX.
How long until ASML makes the same rational choice?
[It is but a flesh wound](https://youtu.be/ZmInkxbvlCs)
How much tax does Shell pay to the Dutch government for them to react this strongly?
if shell contributes €100m to the divident tax is grossly underperforming against their turnover.
bye bye shell, do not forget to take your pollution and CO2 footprint with you.
So the UK is now a worse tax haven than we are. Damn, there goes our national pride.
This is the same thing as regular people being loyal to a brand, do you think the brand is loyal to you? Hell no!
Shell is hell
What government? I thought you guys were still waiting on an outcome for the elections in March.
Where can I read analysis of cost/benefits of scrapping divident taxes for the Netherlands?
Let em go, fuck em. Gas and oil is outdated. The sooner we are forced to completely turn to renewables the better.