Netherlands considers an exit levy proposal in response to corporate relocations
Charlotte Tolman and Michael Molenaars review Dutch efforts to enact a dividend withholding tax exit levy on corporations relocating from the Netherlands and examine how the most recent amendments affect the exit levy proposal.
On July 10, 2020, shortly after Unilever announced its intent to relocate its headquarters to the United Kingdom, a private member of the Dutch opposition party GreenLeft (GroenLinks) submitted to the Dutch parliament a legislative proposal for a so-called Dividend Withholding Tax Exit Levy Emergency Act (Spoedwet conditionele eindafrekening dividendbelasting).
The exit levy proposal provides for a dividend withholding tax exit levy in connection with certain crossborder activities, including reorganizations, relocations, mergers, demergers, and stock mergers. The proposal has been scrutinized and criticized, and multiple amendments have been proposed. For instance, a Fourth Memorandum of Amendment was submitted on December 8, following Royal Dutch Shell PLC’s announcement that it was relocating its headquarters to the United Kingdom. This recent amendment narrows the scope of the initial proposal and modifies some aspects. However, it is still unclear whether a dividend withholding tax exit levy will be enacted into Dutch tax law. This article examines the most important features of, and recent changes to, the Dutch exit levy proposal.
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Authors: Charlotte Tolman and Michael Molenaars
Source: Tax Notes International, Volume 105, 2022
Publication date: 3 January 2022
