Unilever, a multinational consumer goods company, is facing potential repercussions from a proposed Dutch ‘departure tax’ that could cost the company €11 billion. The tax bill, introduced by the Dutch opposition Green Left party, aims to discourage large companies from relocating outside of the Netherlands. Unilever’s CEO, Alan Jope, argues that the proposed legislation would violate several EU laws.

Unilever currently operates as two separately listed entities in the UK and the Netherlands. However, there has been growing support from shareholders for the merger of Unilever NV into the group’s PLC arm. This consolidation of its corporate structure under a single parent company is seen as a strategic move to create a more agile and flexible business, especially in light of the uncertainties caused by the Covid-19 pandemic.

In response to the potential impact of the tax bill, Jope highlighted that two Dutch legal firms and a consulting group have stated that the proposed legislation would violate different EU laws, including the convention of Human Rights. Despite the legal implications, Unilever remains steadfast in its belief that unifying the company is still the best course of action for its shareholders and other stakeholders.

Jope’s comments come on the heels of a positive week for Unilever, as the company exceeded analysts’ expectations with its third-quarter results for 2020. Unilever, renowned for its beauty, home care, and food brands, reported a 4.4% increase in underlying sales, surpassing the predicted 1.3% rise anticipated by City analysts. This outstanding performance represents a significant improvement compared to the previous quarter, which experienced a 0.3% decline in sales.

These robust results further reinforce Unilever’s stance in defending its proposed merger and opposing the Dutch ‘exit’ tax. The company remains confident that the unification will yield long-term benefits and drive continued success, despite the challenges posed by the current global economic climate. Unilever’s determination to safeguard its interests and maintain operational flexibility reflects its commitment to navigating uncertain times and ensuring favorable outcomes for its stakeholders.

Useful Links:
1. Unilever Official Website
2. Unilever UK Website