Which Royal Dutch Shell Shares To Buy To Avoid Paying Dividend Withholding Tax – RDSA Vs RDSB

Update, October 2026: Shell’s A and B shares no longer exist. In January 2022, Royal Dutch Shell simplified its structure into a single line of shares, moved its tax residence and headquarters to the UK and renamed itself Shell plc. Its shares now trade under the ticker SHEL in London and Amsterdam, and as American Depositary Shares in New York. As a UK company, Shell’s dividends are no longer subject to Dutch dividend withholding tax.

Below, we explain the difference between RDSA and RDSB as it was, and why the same lesson still matters when you buy foreign shares.

RDSA vs RDSB: what was the difference?

Some companies are listed on stock exchanges in more than one country. You might think it doesn’t matter where you buy the shares. But for dividend investors, the country can make a real difference because of withholding tax.

Royal Dutch Shell had two types of shares:

• A shares (RDSA): dividends came from the Dutch parent, so they had 15% Dutch dividend withholding tax deducted.
• B shares (RDSB): dividends were paid through a UK route with no withholding tax.

The A and B shares had the same voting rights, ownership stake and declared dividends. Only the tax on the dividend was different.

For a UK investor, the B shares were the better choice. With a dividend of $1.88 a share at the time, A shareholders received about $1.60 after the 15% tax, while B shareholders received the full $1.88.

Example: we owned 320 Shell B shares, which paid about £360 a year in dividends. With A shares, 15% (£54) would have been withheld, leaving £306.

What happened to other dual-listed companies?

Shell wasn’t the only company with a dual structure. Most have since simplified:

• RELX: became a single UK parent company, RELX PLC, in 2018. Its shares trade in London and Amsterdam.
• Unilever: unified under a single UK parent, Unilever PLC, in 2020. Its shares trade in London, Amsterdam and New York.
• BHP: unified under its Australian parent in January 2022 and left the London Stock Exchange. Its main listing is now in Australia.

The lesson still applies: watch out for withholding tax

Many countries deduct tax from dividends paid to foreign investors. The UK doesn’t charge withholding tax on dividends from UK companies. But if you buy foreign shares, some of your dividend may be withheld before it reaches you:

• US shares: the standard rate is 30%, but UK investors who complete a W-8BEN form with their broker pay 15% under the UK-US tax treaty.
• Dutch shares: 15% is usually withheld.
• Other countries: rates vary, and reclaiming any excess can be slow and complicated.

Withholding tax usually applies inside an ISA too, and you can’t reclaim it there. Some SIPP providers can get a lower rate on US dividends, so ask yours. Outside a tax wrapper, you may be able to offset foreign tax against your UK tax bill on the same dividend.

So when a company is listed in more than one country, or when you’re choosing between similar foreign shares, check where its dividends are paid from and how much tax is withheld.

This article is for information only and is not tax or investment advice. When investing, your capital is at risk.