The plans of Anglo-Dutch energy major Shell to move its tax residency to the UK have moved a step closer to realisation after shareholders voted overwhelmingly to back it.
The UK and Dutch arms of Shell, which also makes lubricants like wind turbine gear oil, used to be separate legal entities. However, a merger between them in 2005 led to the new company having a complicated structure, with it being a tax resident in the Netherlands and incorporated in the UK, and it trades two sorts of shares on three major stock exchanges.
Shell’s plan is to move its tax residency to the UK and move to a single share structure, although it will still trade in New York and Amsterdam, in addition to London. Shell says this simpler structure will enable it to purchase more shares back, and it will also avoid a 15% dividend tax that the Dutch authorities levy on large multinational businesses like Shell.
According to the Independent, Sir Andrew Mackenzie, Shell’s Chairman, told a shareholder that the plan did not mean the company would be leaving the Netherlands as such, saying:
“We will stay in the Netherlands, we like the Netherlands. To make this company perform better for the Netherlands is part of the reason we’re making this change. We do want to keep this wonderful company close to this wonderful country.”
Of the votes cast, 99.7% were in favour of the planned move. Mackenzie said that once the appropriate staff councils had been consulted, the board will make a final decision on the matter.
