Dutch Greens Push Ahead With Tax Targeting Unilever Exit

(Bloomberg) -- A minority Dutch Green party is forging ahead with a proposal to tax corporate exits that Unilever warned could cost as much as 11 billion euros ($13 billion) as the consumer-goods maker scraps its base in the Netherlands and unifies its headquarters in London.

The measure would close gaps in the dividend tax regime, according to Bart Snels, the parliament member who’s leading the proposal. His Green party has 14 of the 150 seats in the lower house of parliament, making any move dependent on garnering support from other parties. Unilever said it’ll go ahead anyway.

The maker of Ben & Jerry’s ice cream and Dove soap has said such a move would be contrary to international law. The Dutch Council of State, a panel that reviews legislative proposals, previously said it wouldn’t be “responsible” to pursue the original draft given the high probability that it wouldn’t be viable.

Snels said that his updated measure is viable because it’s a tax on dividends received by shareholders and not on the company. He said the panel was assuming it would be the other way around.

“This law is deadly serious,” Snels said in an interview as he formally published the proposal Friday. “It has been thoroughly crafted with the help of serious academics and policy advisers. There is a decreasing amount of patience for companies that do not take into account the public debate.“

Not Worried

So far, Unilever’s shareholders seem little concerned by the proposal. The Dutch shareholders already voted in favor of a move to the U.K. with 99% in favor. Unilever’s U.K. shareholders are scheduled to vote Monday on the plan, which it aims to complete in November. The stock rose as much as 2.1% Friday.

The measure would need to go through both houses of the Dutch parliament, a process that could take months. It would be retroactive to apply to Unilever’s case. The company said that it will review the bill, though intends to proceed with its plan anyway.

Snels said that his initial proposal received positive feedback from three of the four political parties in the current coalition government, and has updated them of the progress he made.

Unilever has said it wants to end its dual share structure to make it easier to do big M&A deals.

Unilever has maintained dual nationality since the 1930 merger of Margarine Unie of the Netherlands and U.K. soapmaker Lever Brothers.

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