06-30-2015, 09:43 PM
Today, I called Vanguard about participating in the RDS Dividend Scrip Program. From what I was told is that Vanguard does not participate in this program; however, as long as you own and participate in reinvesting all of your RDS.A and RDS.B shares back into company stock the shareholder will not be hit with a 15% Dutch tax. That is as long as you REINVEST ALL of YOUR DIVIDENDS. If one chooses to receive cash in lieu of reinvesting dividends back in RDS stock then the shareholder will have to sell all of their RDS.A shares in order to avoid the Dutch tax, keeping the RDS.B shares and receiving a cash payout from your dividends will impose no taxes on the shareholder. Vanguard said that this is a unique investment and that the shareholder has to pay attention because laws/regulations may change in the future but as of right now as long as both share classes are owned and all dividends are 100% reinvested in company stock no Dutch taxes are imposed. They also said that not all brokerages are the same regarding this stock; in other words, with some brokerages the shareholder will have to sign up for the RDS Dividend Scrip Program.
We will see how this pans out, I now own both RDS.A and RDS.B shares and will reinvest all future dividends in company stock. If for some reason I am taxed I will then sell all of my RDS.A shares and collect the cash payment from RDS.B, all of this is being done in my Vanguard ROTH account.
We will see how this pans out, I now own both RDS.A and RDS.B shares and will reinvest all future dividends in company stock. If for some reason I am taxed I will then sell all of my RDS.A shares and collect the cash payment from RDS.B, all of this is being done in my Vanguard ROTH account.