The Dutch government said today that it was “unpleasantly surprised” by the announcement by Royal Dutch Shell PLC that it planned to move its headquarters from The Hague to London.
“The government deeply regrets that Shell wants to move its headquarters to the United Kingdom,” said Finance and Climate Minister Steve Block.
“We are in dialogue with Shell’s management about the implications of this plan for jobs, critical investment decisions and sustainability.”
The Anglo-Dutch hydrocarbon giant announced earlier today that it intends to move in order to simplify its corporate structure and make it easier to distribute profits to shareholders.
The move is also announced a few months after a Dutch court ordered Shell to speed up its plans to reduce greenhouse gas emissions, a decision against which Shell has appealed.
It follows years of questions in the Netherlands about Shell’s unusual tax structure and dual share rating system, which has been in place since 2005.
While the Netherlands withholds 15% of the dividend tax on companies based in the Netherlands, Britain does not have such a tax.
Under Shell’s dual system, holders of “A” shares receive regular dividends and are subject to tax.
However, payments for the “B” shares are distributed through a “Dividend Access Mechanism”, essentially through a trust registered in the Channel Islands Jersey, avoiding Dutch tax withholding.
Although the settlement was approved by the Dutch tax authorities in a confidential agreement, its legality under European Union law has been challenged by tax experts.
Shareholders are expected to decide on December 10 during the general meeting in Rotterdam on the proposed amendments, which also include the creation of a single series of shares.
Shell and Unilever both pushed for exemption from dividend withholding tax in the Netherlands. Legends released by the Dutch government in 2018 revealed that the tax was a “decisive” factor for Unilever when it made a similar decision to set up its sole headquarters in London that year.
Meanwhile, the environmental group that won the lawsuit in the Netherlands against Shell forcing the oil giant to reduce its carbon dioxide emissions said today that the company’s plans to move its headquarters to London will not affect the case.
“The news has no negative consequences for the Milieudefensie v. Shell climate case,” the organization, known internationally as Friends of the Earth, said in a statement. “Rather, relocation to the UK opens up a new front, including for future affairs.”
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