October 5, 2018 / 1:44 PM / 2 months ago

Dutch to reconsider scrapping dividend tax after Unilever U-turn

FILE PHOTO: Netherlands' Prime Minister Mark Rutte addresses the 73rd session of the United Nations General Assembly at U.N. headquarters in New York, U.S., September 26, 2018. REUTERS/Eduardo Munoz

THE HAGUE (Reuters) - The Dutch government will reconsider plans to scrap the country’s dividend tax, Prime Minister Mark Rutte said on Friday, hours after multinational Unilever (ULVR.L) (UNc.AS) said it would not move its headquarters to the Netherlands.

Unilever scrapped plans to move its headquarters to Rotterdam earlier on Friday in the face of a shareholder revolt, keeping one of Britain’s most valuable companies in London ahead of Brexit.

The change of course could have political consequences for Rutte, who worked for Unilever from 1992-2002 before entering politics. He has spent vast political capital convincing coalition government partners to support doing away with the 15 percent tax on corporate dividends.

Rutte has maintained that attracting Unilever was not the objective of dropping the tax, which is strongly opposed by many Dutch people who see it as a 1.9 billion euro ($2.2 billion) tax cut for foreign investors.

“We didn’t decide to scrap the dividend tax for just one company, but the fact that such a large company that had decided to come to the Netherlands has withdrawn its plan is very relevant for our considerations,” Rutte told journalists.

“Scrapping the dividend tax was part of a broad range of measures aimed at improving our competitiveness. We will reconsider this whole package in the coming time,” he said.

Reporting by Stephanie van den Berg and Bart Meijer; Writing by Anthony Deutsch; Editing by Hugh Lawson/Keith Weir

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