After ninety years of joint history, Unilever will be a wholly British company with headquarters in London starting next Monday. This is despite an urgent law submitted by GroenLinks for a “relocation fine” of 11 billion euros, which the House has yet to consider.
Unilever confirmed on Friday that it hopes to complete “unification” this weekend, making it fully British as of Monday. The food and care multinational now has two more head offices (in London and Rotterdam) and two shares. The merger should make the company behind Knorr, Dove, Glorix and Calvé, among others, more effective. Both Dutch and British shareholders voted in favor with more than 99 percent.
But in the meantime, GroenLinks MP Bart Snels made an emergency law for a ‘relocation fine’. This means that companies that move to a country without dividend tax (such as the United Kingdom) must first settle with the Dutch tax authorities. Unilever previously calculated that this fine would amount to 11 billion euros for the company. The multinational also reported that it would withdraw the move if the emergency law was passed by the House of Representatives and the Senate.
Whether that will happen will only become clear later, but a majority of the House was in favor of it earlier. Nevertheless, Unilever is now continuing the move. The timing is remarkable, because on the day the company turns British, next Monday, the House will hold a hearing on the emergency law. The multinational does not want to comment on whether the House will regard the completion of the move as a provocation, which will only increase the sympathy for the emergency law.
International treaties
Unilever also does not want to say whether it has indications that the House will not adopt the law in its current form. Or that the multinational assumes that a judge will cancel it if the law is passed. Unilever previously stated that the relocation fine is contrary to European law and various treaties.
Leiden professor of tax law Jan Vleggeert previously stated that the multinational has a chance in court, because international treaties take precedence over national law. It could take five years to challenge the relocation fine up to the highest European level, the professor noted. The Council of State recently issued a deadly judgment (“not justified”), but according to petitioner Snels, this body sees his proposal wrong.
Unilever, which has consistently emphasized that it is primarily a paper operation, will hope to be able to close the case quickly. Two years ago, the plan of then CEO Paul Polman to make the multinational fully Dutch ended in a drama. Angry British investors torpedoed the proposal, after which Prime Minister Rutte withdrew the hated abolition of the dividend tax of 2 billion euros a year, which he continued to support until the end.
