AMSTERDAM (THE NETHERLANDS) – It is not “legally sustainable” to levy a one-time tax on Unilever over its bid to unify management by having a single headquarters in London, said a top legal body in the Netherlands.
One of the few hurdles faced by Unilever, which is simplifying its Anglo-Dutch structure, is the legislation proposed by the opposition Green Left party for an exit tax. Shareholders of the UK are slated to vote on the move on Monday.
If the law is enacted, the tax would cost Unilever 11 billion euros (10 billion pounds).
The Dutch Council of State, which is tasked with advising parliament on the legality of bills, said on Friday that the tax violates the fundamental principles of the rule of law.
Once it comes into force, “the chance that this proposal will turn out to be not legally sustainable is so great that (we) consider introducing it irresponsible,” the Council said.
Green Left has said that it has not ditched its plan and it has re-introduced the legislation after tweaking it.
“Unilever is threatening to leave the Netherlands with its pockets full so that shareholders can avoid taxes,” the architect of the bill Bart Snels said.
The firm said on Friday that it was studying the modified bill. Parliament is yet to set a date to debate the bill and it is unlikely to be passed any time before Unilever’s unification is complete on Nov. 29.
“The boards intend to proceed with their proposals provided that, in the boards’ view, unification remains in the best interests of Unilever, its shareholders and other stakeholders as a whole,” Unilever said.