Unilever 2000 Annual Report Download - page 121

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Unilever Annual Report & Accounts and Form 20-F 2000 Shareholder Information
Taxation for US residents
The following notes are provided for guidance. US residents
should consult their local tax advisers, particularly in
connection with potential liability to US taxes on
disposal, lifetime gift or bequest of their shares:
Netherlands
Taxation on dividends
Dividends of companies in the Netherlands are subject
to dividend w ithholding tax of 25% . Where one is entitled
to the benefits of the current Income Tax Convention
(‘the Convention’ concluded on 18 December 1992)
between the United States and the Netherlands, w hen
dividends are paid by NV to:
• a United States resident;
• a corporation organised under the laws of the
United States (or any territory of it) having no permanent
establishment in the Netherlands of w hich such shares
form a part of the business property;
• or any other legal person subject to United States
Federal income tax w ith respect to its world-wide
income, having no permanent establishment in the
Netherlands of w hich such shares form a part of the
business property;
these dividends qualify for a reduction of Netherlands
withholding tax on dividends from 25% to 15% (to 5%
if the beneficial owner is a company which directly holds
at least 10% of the voting power of NV shares and to 0%
if the beneficial owner is a qualified ‘Exempt Organisation’
as defined in article 36 of the Convention).
The entire dividend (including the withheld amount) will
be dividend income to the United States shareholder not
eligible for the dividends received deduction allow ed to
corporations. However, the Netherlands w ithholding tax will
be treated as a foreign income tax that is eligible for credit
against the shareholder’s United States income taxes.
Where a United States resident or corporation has a permanent
establishment in the Netherlands, which has shares in
Unilever N.V. forming part of its business property, dividends
it receives on those shares are included in that establishment’s
profit. They are subject to the Netherlands income tax or
corporation tax, as appropriate, and the Netherlands tax on
dividends w ill be applied at the full rate of 25% . This tax
will be treated as foreign income tax eligible for credit
against the shareholder’s United States income taxes.
Under a provision of the Netherlands Dividend Tax Act NV
is entitled to a credit (up to a maximum of 3% of the gross
dividend from w hich dividend tax is withheld) against the
amount of dividend tax w ithheld before remittance to the
Netherlands tax authorities. For dividends paid on or after
1 January 1995, the United States tax authority may take
the position that the Netherlands w ithholding tax eligible
for credit should be limited accordingly.
Under the Convention, qualifying United States
organisations that are generally exempt from United States
taxes and that are constituted and operated exclusively to
administer or provide pension, retirement or other employee
benefits may be exempt at source from w ithholding tax on
dividends received from a Netherlands corporation. A recent
agreement betw een the United States and the Netherlands
tax authorities describes the eligibility of these US organisations
for benefits under the Convention and the procedures for
them to claim benefits under the Convention. This agreement
was published by the US Internal Revenue Service on
20 April 2000 in release IR-INT-2000-9 and these procedures
apply to dividends made payable after 30 June 2000.
A United States trust, company or organisation that is
operated exclusively for religious, charitable, scientific,
educational or public purposes, is now subject to an initial
25% withholding tax rate. Such an exempt organisation
is entitled to reclaim from the Netherlands Tax Authorities a
refund of the Netherlands dividend tax, if and to the extent
that it is exempt from United States Federal Income Tax and
it would be exempt from tax in the Netherlands if it were
organised and carried on all its activities there.
If you are a Unilever shareholder resident in any country other
than the United States or the Netherlands, any exemption
from, or reduction or refund of, the Netherlands dividend
withholding tax may be governed by the ‘Tax Regulation for
the Kingdom of the Netherlands’ or by the tax convention, if
any, between the Netherlands and your country of residence.
Taxation on capital gains
Under the Convention, if you are a United States resident or
corporation and you have capital gains on the sale of shares
of a Netherlands company, these are generally not subject
to taxation by the Netherlands. The exception to this is if
you have a permanent establishment in the Netherlands and
the capital gain is derived from the sale of shares w hich form
part of that permanent establishment’s business property.
Succession duty and gift taxes
Under the Estate and Inheritance Tax Convention betw een
the United States and the Netherlands of 15 July 1969,
United States individual residents who are not Dutch citizens
who have shares w ill generally not be subject to succession
duty in the Netherlands on the individual’s death, unless the
shares are part of the business property of a permanent
establishment situated in the Netherlands.
A gift of shares of a Netherlands company by a person w ho
is not a resident or a deemed resident of the Netherlands is
generally not subject to Netherlands gift tax. A non-resident
Netherlands citizen, however, is still treated as a resident
of the Netherlands for gift tax purposes for ten years and
any other non-resident person for one year after leaving
the Netherlands.