{"id":18220,"date":"2022-02-09T13:17:59","date_gmt":"2022-02-09T12:17:59","guid":{"rendered":"https:\/\/faces-online.nl\/?p=18220"},"modified":"2022-02-09T13:17:59","modified_gmt":"2022-02-09T12:17:59","slug":"18220","status":"publish","type":"post","link":"http:\/\/faces-online.nl\/en\/18220\/","title":{"rendered":"The end of an era for &#8220;Royal Dutch Shell&#8221;"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">On friday the 10th of december during a shareholders meeting,\u00a0 Royal Dutch Shell plc received permission to move their main office to London. As much as 99 percent of the shareholders present agreed with the relocation. With this development, the oil- and gas company will no longer include \u201cRoyal Dutch\u201d after more than 100 years in their name, and simultaneously will lose the Dutch part of its identity. <\/span><span style=\"font-weight: 400;\">[G1]<\/span><\/p>\n<h2><b>Dividend tax<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Prior to the administrative departure of Shell, the oil- and gas giant was fiscally located in both the United Kingdom and the Netherlands. Tax laws in the Netherlands are different compared to tax laws in the United Kingdom; namely, dividend tax, which is a percentage of 15% in the Netherlands, does not exist in the UK. This means that shareholders receive relatively more dividends than shareholders in the Netherlands.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In an interview with the FD (Financieele Dagblad), the CEO of Shell, Ben van Beurden, stated that the matter regarding dividend has played an important role in the decision to move Shell to the UK. The top executive has indicated that the dividend tax has been eyesore for the multinational for a longer period of time. Shell has already had many conversations with the Dutch government for years. Subsequently, in 2017 the cabinet has advocated for the abolishment of the dividend tax. However, this proposal received heavy criticism from the Chamber and the society, after which the cabinet decided to cancel the proposal in 2018. The fact that the plan did not go through the Chamber led to the creation of serious plans for Shell to leave the Netherlands. <\/span><span style=\"font-weight: 400;\">[G2]<\/span><\/p>\n<blockquote><p><span style=\"text-decoration: underline;\"><strong>&#8220;Despite the departure of the multinational, Ben van Beurden indicated that the activities of Shell in the Netherlands will remain.&#8221;<\/strong><\/span><\/p><\/blockquote>\n<h2><b>Dual structure<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Furthermore, another important factor for Shell was the dual fiscal structure that the company had. Due to the difference in tax rules between the two home countries of Shell, the multinational had to work with two different kinds of shares (a British and a Dutch one). According to the company, this complex structure brought too many administrative hurdles. For instance, the process of collecting new finances, by issuing additional shares, was more complicated due to the fact that Shell worked with two different shares. With working with only one share, this process would be simplified which eases many future transactions, such as acquisitions. Next to that, the multinational has planned to buy back a proportionate amount of shares outstanding. Because of the tax rules in the UK, it is substantially cheaper for Shell to buy back British shares. However, the company had to cope with restrictions, In the amount of shares Shell could buy back. The level of restrictions depends on the amount of volume of trades of Shell\u2019s shares. Due to the reduction in complexity in Shell\u2019s structure, the volume of British shares traded will increase which means that Shell is able to buy back more shares. <\/span><span style=\"font-weight: 400;\">[G3]\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the departure of the multinational, Ben van Beurden indicated that the activities of Shell in the Netherlands will remain. The oil and gas giant wishes to stay a big player regarding the transition to delivered green energy in the Netherlands. Above that,\u00a0 Marjan van Loon, president-director of the Dutch division of Shell, states that the fiscal transition to a pure British company would only speed up the process of transition to green energy in the Netherlands. Nonetheless, Shell\u2019s plan will have negative consequences for the State\u2019s treasury of the Dutch government. The departure of Shell would mean that the Netherlands would miss out on hundreds of millions on tax income. However, the Second Chamber will discuss GroenLinks proposal to fine companies who depart to a foreign country without dividend tax rules. To date, it is still unclear whether this proposal can expect a majority of the vote in the Second- and First Chamber. <\/span><span style=\"font-weight: 400;\">[G4]\u00a0<\/span><\/p>\n<h2><b>Predecessor<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">This is not the first time a multinational company has taken the decision to fiscally depart from the Netherlands. Prior to Shell, Unilever, which had its headquarters located in London and Rotterdam since 1929, has transformed into a purely British company in 2020. Just like Shell, Unilever had to deal with a complex dual structure. Consequently, in 2018 the company decided to maintain one nationality. Initially, the company had plans to move to the Netherlands. However, this initiative received backlash from the camp of shareholders after it turned out the Dutch government decided not to abolish the dividend tax. As a predecessor of Shell, Unilever also risked receiving a fine, of an amount of 11 billion euros, from the Dutch government when they planned to move to the UK. Fortunately for Unilever, they managed to evade this fine after the Dutch Cabinet decided not to enforce the potential new law retroactively. <\/span><span style=\"font-weight: 400;\">[G5]\u00a0<\/span><\/p>\n<h2><b>Business climate\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Now that two big multinationals have left the Netherlands, it is important to look at the qualities of the business climate in the country as this gives a signal that the business environment might lose its competitive value compared to other countries. On the contrary, to keep things in perceptive, Shell and Unilever both were companies with a complex dual structure and British-Dutch roots. Hence, there is no valid reason to believe that this is an acute problem for the Netherlands.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">[G1]<\/span><a href=\"https:\/\/www.volkskrant.nl\/economie\/na-unilever-vertrekt-ook-shell-hoe-erg-is-dat-voor-nederland~b9e0e04b\/?referrer=https%3A%2F%2Fwww.google.com%2F\"><span style=\"font-weight: 400;\">https:\/\/www.volkskrant.nl\/economie\/na-unilever-vertrekt-ook-shell-hoe-erg-is-dat-voor-nederland~b9e0e04b\/?referrer=https%3A%2F%2Fwww.google.com%2F<\/span><\/a><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0[G2]https:\/\/fd.nl\/bedrijfsleven\/1419454\/haags-wanhoopsoffensief-om-shell-voor-nederland-te-behouden-wca2cabqDglC<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0[G3]<\/span><a href=\"https:\/\/theasset.nl\/sectoren\/duurzaam\/van-twee-kanten-royal-dutch-shell\/\"><span style=\"font-weight: 400;\">https:\/\/theasset.nl\/sectoren\/duurzaam\/van-twee-kanten-royal-dutch-shell\/<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0[G4]<\/span><a href=\"https:\/\/www.volkskrant.nl\/economie\/shell-krijgt-groen-licht-voor-vertrek-grote-meerderheid-aandeelhouders-stemt-voor~ba37fe11\/\"><span style=\"font-weight: 400;\">https:\/\/www.volkskrant.nl\/economie\/shell-krijgt-groen-licht-voor-vertrek-grote-meerderheid-aandeelhouders-stemt-voor~ba37fe11\/<\/span><\/a><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0[G5]https:\/\/fd.nl\/politiek\/1417231\/unilever-ontsnapt-aan-verhuisboete-wca2cabqDglC<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On friday the 10th of december during a shareholders meeting,\u00a0 Royal Dutch Shell plc received permission to move their main office to London. As much as 99 percent of the shareholders present agreed with the relocation. With this development, the oil- and gas company will no longer include \u201cRoyal Dutch\u201d after more than 100 years in their name, and simultaneously will lose the Dutch part of its identity. [G1] Dividend tax Prior to the administrative departure of Shell, the oil- and gas giant was fiscally located in both the United Kingdom and the Netherlands. Tax laws in the Netherlands are different compared to tax laws in the United Kingdom; namely, dividend tax, which is a percentage of 15% in the Netherlands, does not exist in the UK. This means that shareholders receive relatively more dividends than shareholders in the Netherlands.\u00a0 In an interview with the FD (Financieele Dagblad), the CEO of Shell, Ben van Beurden, stated that the matter regarding dividend has played an important role in the decision to move Shell to the UK. The top executive has indicated that the dividend tax has been eyesore for the multinational for a longer period of time. Shell has already had many conversations with the Dutch government for years. Subsequently, in 2017 the cabinet has advocated for the abolishment of the dividend tax. However, this proposal received heavy criticism from the Chamber and the society, after which the cabinet decided to cancel the proposal in 2018. The fact that the plan did not go through the Chamber led to the creation of serious plans for Shell to leave the Netherlands. [G2] &#8220;Despite the departure of the multinational, Ben van Beurden indicated that the activities of Shell in the Netherlands will remain.&#8221; Dual structure Furthermore, another important factor for Shell was the dual fiscal structure that the company had. Due to the difference in tax rules between the two home countries of Shell, the multinational had to work with two different kinds of shares (a British and a Dutch one). According to the company, this complex structure brought too many administrative hurdles. For instance, the process of collecting new finances, by issuing additional shares, was more complicated due to the fact that Shell worked with two different shares. With working with only one share, this process would be simplified which eases many future transactions, such as acquisitions. Next to that, the multinational has planned to buy back a proportionate amount of shares outstanding. Because of the tax rules in the UK, it is substantially cheaper for Shell to buy back British shares. However, the company had to cope with restrictions, In the amount of shares Shell could buy back. The level of restrictions depends on the amount of volume of trades of Shell\u2019s shares. Due to the reduction in complexity in Shell\u2019s structure, the volume of British shares traded will increase which means that Shell is able to buy back more shares. [G3]\u00a0 Despite the departure of the multinational, Ben van Beurden indicated that the activities of Shell in the Netherlands will remain. The oil and gas giant wishes to stay a big player regarding the transition to delivered green energy in the Netherlands. Above that,\u00a0 Marjan van Loon, president-director of the Dutch division of Shell, states that the fiscal transition to a pure British company would only speed up the process of transition to green energy in the Netherlands. Nonetheless, Shell\u2019s plan will have negative consequences for the State\u2019s treasury of the Dutch government. The departure of Shell would mean that the Netherlands would miss out on hundreds of millions on tax income. However, the Second Chamber will discuss GroenLinks proposal to fine companies who depart to a foreign country without dividend tax rules. To date, it is still unclear whether this proposal can expect a majority of the vote in the Second- and First Chamber. [G4]\u00a0 Predecessor This is not the first time a multinational company has taken the decision to fiscally depart from the Netherlands. Prior to Shell, Unilever, which had its headquarters located in London and Rotterdam since 1929, has transformed into a purely British company in 2020. Just like Shell, Unilever had to deal with a complex dual structure. Consequently, in 2018 the company decided to maintain one nationality. Initially, the company had plans to move to the Netherlands. However, this initiative received backlash from the camp of shareholders after it turned out the Dutch government decided not to abolish the dividend tax. As a predecessor of Shell, Unilever also risked receiving a fine, of an amount of 11 billion euros, from the Dutch government when they planned to move to the UK. Fortunately for Unilever, they managed to evade this fine after the Dutch Cabinet decided not to enforce the potential new law retroactively. [G5]\u00a0 Business climate\u00a0 Now that two big multinationals have left the Netherlands, it is important to look at the qualities of the business climate in the country as this gives a signal that the business environment might lose its competitive value compared to other countries. On the contrary, to keep things in perceptive, Shell and Unilever both were companies with a complex dual structure and British-Dutch roots. Hence, there is no valid reason to believe that this is an acute problem for the Netherlands. \u00a0[G1]https:\/\/www.volkskrant.nl\/economie\/na-unilever-vertrekt-ook-shell-hoe-erg-is-dat-voor-nederland~b9e0e04b\/?referrer=https%3A%2F%2Fwww.google.com%2F\u00a0 \u00a0[G2]https:\/\/fd.nl\/bedrijfsleven\/1419454\/haags-wanhoopsoffensief-om-shell-voor-nederland-te-behouden-wca2cabqDglC \u00a0[G3]https:\/\/theasset.nl\/sectoren\/duurzaam\/van-twee-kanten-royal-dutch-shell\/ \u00a0[G4]https:\/\/www.volkskrant.nl\/economie\/shell-krijgt-groen-licht-voor-vertrek-grote-meerderheid-aandeelhouders-stemt-voor~ba37fe11\/ \u00a0[G5]https:\/\/fd.nl\/politiek\/1417231\/unilever-ontsnapt-aan-verhuisboete-wca2cabqDglC<\/p>\n","protected":false},"author":92,"featured_media":18233,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1659,1],"tags":[113,636,958],"class_list":["post-18220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-column-nl-en","category-uncategorized","tag-accounting-2","tag-finance","tag-shares"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The end of an era for &quot;Royal Dutch Shell&quot; - Faces Online<\/title>\n<meta name=\"description\" content=\"Shell moves its head office to London. 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Want to know more on Shell's reasoning? 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