Dutch Parliament gives green light for starting legislative process of the proposed exit tax - Hoofdinhoud
This afternoon, the Lower House of the Dutch Parliament has started the legislative process of the proposal for a conditional exit tax in the Dutch Dividend Withholding Tax.
Tweede Kamerlid
The purpose of the proposed exit tax is first of all to safeguard the accrued Dutch dividend withholding tax claim on the profit reserves of a company. Secondly, this exit tax would prevent corporate reorganisations that would result in the disappearance of this dividend withholding tax claim without a foreign dividend tax claim replacing it. According to Bart Snels, the initiator of this new bill on behalf of GroenLinks, the absence of an exit tax in the current Dutch Dividend Tax Act 1965 is a tax gap that urgently needs to be filled.
If adopted, the proposal will apply retroactively as of 18 September 2020, 12 noon. This means that from this date companies and their shareholders will have to take this exit tax into account when considering a cross-border reorganisation in which the accrued Dutch dividend withholding tax claim on the profit reserves is lost and is not taken over by another country. Therefore, in the specific case of Unilever, the Board has already promised its shareholders not to leave the Netherlands if the bill is passed.
In the coming weeks, members of the Dutch Parliament will be informed by experts about the technicalities of the bill. After that, the Dutch Parliament will send an official report consisting of questions from all political parties to the initiator of the bill. The deadline for this report is the 10th of December 2020. The report will be publicly available.
Bart Snels: “This is serious legislation designed to end a serious form of tax avoidance. I look forward to answering all technical and legal questions and to demonstrate that this proposal complies with international laws and regulations.”
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