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What is the difference between Royal Dutch A and Royal Dutch B shares please?

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What is the difference between Royal Dutch A and Royal Dutch B shares please?

0
10

RDS.B is issued out of London and RDS.A is issued out of the Netherlands. The Netherlands withholds tax on RDS.A dividends and the UK doesn’t withhold tax on RDS.B dividends. In the US it possibly may not make a lot of difference which share is purchased if it is not a taxed deferred account (eg. retirement account IRA, 401K, etc.) since generally any taxes withheld by a foreign country can normally be used as a tax credit against the tax owed on the dividends you receive (may make a difference if your income is low). However, if it is a taxed deferred account, the money withheld is just lost so the RDS.B shares are the much better buy. Even in a non-tax deferred account, I would always choose RDS.B since dividends in the US could be taxed at 15% or less which could be less than the tax withheld even for high income earners.

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