GroenLinks is coming up with a new version of its legislative proposal for a departure penalty for companies. The most important change is that the exit tax will soon apply not only to large companies, but to all companies.
In addition, it has now been made clear that the tax will be borne by the shareholders and not by the company itself. The changes are contained in a letter from GroenLinks-Kamerlid Snels to the House of Representatives.
The purpose of the GroenLinks bill is to prevent companies from circumventing the Dutch dividend tax by moving abroad. Initially, the departure penalty would only apply to companies with an annual turnover of at least EUR 750 million. The proposal was therefore seen as a way of thwarting the relocation plans of multinationals such as Unilever and Shell. Unilever had already indicated that the proposed relocation of the head office would not be worthwhile if the bill was adopted.
Last week, the Council of State sent an opinion on the bill to Snels. For parties, that opinion may be important for their consideration of whether to vote for or against. But for the time being, Snels has not yet made the opinion public.
Illegal state aid
The first version of the bill gave rise to a storm of criticism from multinationals and their interest groups. They claimed that small businesses would be favoured by the bill because it only applied to companies with a mega turnover. It would even be a form of illegal state aid to SMEs.
“I understood that criticism,” says Jan van de Streek, Professor of Taxation at the University of Amsterdam. Van de Streek was also advisor to GroenLinks in writing the bill. “From a legal point of view it was important to make the law applicable to all companies
According to Van de Streek, the change does not make much difference in practice. “If SMEs are going to do business abroad, they will not relocate their head office. Then they set up a subsidiary company” In other words: SMEs will hardly ever be affected by the proposed departure penalty.
Second profit tax
Another point of criticism from large companies was that the departure penalty would become a kind of second profit tax. The critics assumed that the fine had to be paid by the company itself. “In such a case, it would indeed be a kind of additional profit tax. And that, of course, cannot be the intention“, says Van de Streek. “That is at odds with a lot of international agreements
In the letter, Snels therefore clarifies that it is not the company that pays dividend that has to pay the exit tax, but the shareholders who receive that dividend. Just like with ordinary dividend tax. In doing so, Snels mainly creates clarity for the shareholders of Unilever. They meet on Monday for the shareholders meeting with the most important item on the agenda: the relocation of the company.
Possible more changes
Another minor change is the effective date. It was originally on 10 July, which would give the law retroactive effect. In the new proposal, the law, still with retroactive effect, enters into force today.
It is possible that even more changes will be made quickly. He is still studying the opinion of the Council of State. If that still gives rise to changes, Snels will implement them in the final bill which he will soon send to the Lower House with all the changes.