The House of Representatives wants an explanation from State Secretary Marnix van Rij before 2:45 PM this afternoon about an amendment to the articles of association that OCI is submitting to the shareholders today.
It does not happen often that a shareholders’ meeting leads to parliamentary questions. But today the time has come, at OCI, that an extraordinary shareholders’ meeting is convening for an amendment to the articles of association.
OCI wants to return several billion euros to shareholders as a result of the sale of OCI’s stake in Fertiglobe (a United Arab Emirates-based manufacturer and distributor of nitrogen fertilizers) to Adnoc. That raised $3.62 billion. OCI proposes the following construction for this:
As you can see above, the share capital is first increased (by €2.7 billion) and immediately afterwards decreased again (by the same amount). This trick should ensure that the fertilizer manufacturer can pay out €2.7 billion tax-free to shareholders. It led to the following headline in the NRC: ‘How chemical company OCI pays out billions to its shareholders and leaves the tax authorities empty-handed’.
€5 billion paid out tax-free
It is not the first time that OCI has used this trick: the same thing happened in the previous two years. If shareholders give the green light for the amendment to the articles of association this afternoon, OCI will have paid out a total of €5 billion tax-free over the past three years. According to NRC, this means that the Dutch tax authorities will miss out on €750 million.
MPs from GroenLinks-PvdA and D66 have now urgently requested an explanation from State Secretary Marnix van Rij of Finance (responsible for tax matters). Before the start of the shareholders’ meeting at 2:45 p.m., they want to have an answer to the question ‘whether and how it is possible to avoid dividend tax by first increasing the issued capital and then making a tax-free capital return, and whether this has consequences for the customized agreements. that the government is making with industrial companies to make their production process more sustainable.’ You can find the parliamentary questions here.
The government is making individual agreements about greening with industrial companies that emit a lot, including with OCI. Some companies receive subsidies to take measures to become more sustainable. This makes constructions that lead to tax avoidance extra controversial. It is not known whether OCI also receives subsidies.
