I think it worth quoting the relevant passage of the RNS more extensively, as it gives background about what the "possible Dutch exit tax bill" is and what the issues are about it:
... When we issued the Unification shareholder circular in August we noted that on 10 July 2020, a member of the Dutch Parliament for GroenLinks (a Dutch opposition party) had proposed a private members bill which sought to impose an exit tax on companies leaving the Netherlands in certain circumstances.
We announced on 9 October 2020 that the GroenLinks initiative bill had been tabled in the Dutch Parliament. The tabled bill contains a number of amendments to the previous proposals dated 10 July and 18 September 2020 including:
· to provide for automatic (as opposed to conditional) deferral of the exit tax assessment. As described in our shareholder circular, deferral would allow the exit tax assessment to be paid over time to the extent that the acquiring company: (i) subsequently makes distributions of reserves on the new shares issued to the former Dutch company's shareholders ("Relevant Shares"), including by way of distributions of profits in any form, deemed distributions and certain share buy-backs; and (ii) pays an amount to the Dutch revenue equal to the withholding tax that would have been payable by the acquiring company in respect of such distribution had it been tax resident in the Netherlands ("Deemed Withholding Tax"); and
· a provision which seeks to provide the acquiring company with a right of recourse to withhold the Deemed Withholding Tax from holders of Relevant Shares at the time of each distribution. Despite this provision, in the context of Unification as proposed, PLC would have no enforceable means (either legally under English law or practically) to exercise this right of recourse and to withhold the Deemed Withholding Tax. If the company is not able to exercise this right of recourse, shareholders would not be able claim a corresponding credit for the Deemed Withholding Tax borne by the company.
Despite the amendments made Unilever has received legal advice that, if the bill were enacted in its current form with retroactive effect and were applied to Unification, it should infringe the Dutch UK tax treaty, other tax treaties which the Netherlands has concluded with states in which shareholders of Unilever PLC or Unilever NV reside, primary and secondary EU law and the First Protocol to the European Convention on Human Rights.
It is not clear when, or indeed if at all, the bill will be enacted, or in what form. ...
I'm not sure what to make of that, beyond that:
* as a private member's bill proposed by an opposition politician, its chances of being enacted may not be all that high (but only "may not be" - I know far too little about Dutch politics to be able to say "aren't"!);
* if it is enacted in its current form, it will face legal challenges;
* that if nevertheless it is enacted and comes into force in its current form and survives the legal challenges, then as Unilever says in the second bullet point, it wouldn't be possible in practice for the company to actually withhold the 'Deemed Withholding Tax' from dividend payments to holders of 'Relevant Shares'. All Unilever would be able to do is pay the 'Deemed Withholding Tax', which would reduce the cash they have available for distribution and thus result in dividend payments to shareholders generally that were smaller than they otherwise would be. That's because it's only possible to clearly identify all the 'Relevant Shares' immediately after unification has happened - all the Unilever shares at that point will be the same class of share and they don't carry serial numbers or anything like that, so they can only be identified by who holds them and how they were acquired, and that starts to become unresolvable as soon as trading starts in the new shares. (E.g. suppose that just before unification, I hold 500 Unilever plc shares. They're clearly not 'Relevant Shares' after unification, but then I decide to buy 100 more shares. So I buy on the market, with the shares I buy probably coming from the holding of a market-maker or market-maker-equivalent which has been buying shares offered for sale by numerous sellers, some of them selling 'Relevant Shares' and some not. So how many 'Relevant Shares' do I now own? The only practical way to determine that would be to make the 'Relevant Shares' be a separate class of shares (which would doubtless be priced differently because of their less favourable tax status) but the unification isn't doing that.)
Gengulphus