On 15 November 2021, a third bill of amendment was published in respect of the pending opposition member’s bill for an exit tax for Dutch dividend withholding tax (DWT) purposes. This amendment reinstates a retroactive effect back to 15 November 2021, 3PM CET.

Based on the original proposal submitted by a member of a left-wing opposition party, certain cross-border migrations, mergers, demergers and share-for-share mergers that took place on or after 18 September 2020 would be subject to DWT based on a deemed distribution of profit reserves exceeding recognised capital for DWT purposes. The retroactive effect until 18 September 2020 was removed from the pending bill only on 26 October 2021. For more information on the proposed bill of law and its subsequent amendments, we refer to our Flash of 10 July 2020 and our latest website post of 26 October 2021.

This amendment of 15 November 2021 can be viewed in the context of the announcement by Royal Dutch Shell of its intention to move its head offices out of the Netherlands. The exit tax, if enacted without further changes, will apply to all cross-border reorganisations in scope of the proposed bill that are implemented after 15 November 2021, 3PM CET. The proposed bill of law provides no exception for reorganisations that have been set in motion before said date and time.

It is not clear if and when the opposition member’s bill will be discussed in parliament and, if so, whether there will be a majority in favour of the proposed exit tax for DWT purposes.