Dividends paid on Class A ordinary shares have a Dutch source for tax purposes and are subject to Dutch withholding tax (see note 1 - Taxation). It is the expectation and the intention, although there can be no certainty, that holders of Class B ordinary shares will receive dividends via the dividend access mechanism (see note 2 - Dividend Access Mechanism).

Any dividends paid via the dividend access mechanism will have a UK source for Dutch and UK tax purposes; there will be no UK or Dutch withholding tax on such dividends.

Note 1 – Taxation

Royal Dutch Shell is incorporated in England and Wales and tax-resident in the Netherlands. As a tax resident of the Netherlands, it is generally required by Dutch law to withhold tax at a rate of 15% on dividends on its ordinary shares and ADSs, subject to the provisions of any applicable tax convention or domestic law. Based on a policy statement issued by the Dutch Ministry of Finance on 29 April 29, 2016 (which will be formalized in law), and depending on their particular circumstances, non-Dutch resident shareholders may be entitled to a full or partial refund of Dutch dividend withholding tax.

Furthermore, In April 2016, there were changes to the UK taxation of dividends. The dividend tax credit has been abolished, and a new tax free dividend allowance of £5,000 introduced. Dividend income in excess of the allowance will be taxable at the following rates: 7.5% within the basic rate band; 32.5% within the higher rate band; and 38.1% on dividend income taxable at the additional rate.

If you are uncertain as to the tax treatment of any dividends you should consult your own tax advisor.

The following sets forth the operation of the provisions on dividends on Royal Dutch Shell’s various ordinary shares and ADSs to US and UK holders, as well as certain other tax rules pertinent to holders. Each holder should consult their tax advisor.

Dividends paid on the Dividend Access Share

There is no Dutch withholding tax on dividends paid on Royal Dutch Shell Class B ordinary shares or Class B ADSs provided that such dividends are paid on the Dividend Access Share pursuant to the Dividend Access Mechanism.

Dividends paid on the Dividend Access Share are treated as UK-source for tax purposes and there is also no UK withholding tax on them.

All dividends with respect to Class B ordinary shares and Class B ADSs have to date been paid on the Dividend Access Share pursuant to the Dividend Access Mechanism.

Dutch withholding tax

United States resident holders

When Dutch withholding tax applies, a United States resident holder will generally be subject to Dutch withholding tax at a rate of 15%. A United States resident holder who is entitled to the benefits of the tax convention between the United States and the Netherlands may be entitled to a reduction in the Dutch withholding tax. For example, if the US holder is an exempt pension trust as described in article 35 of the Convention, or an exempt organisation as described in article 36 thereof, the US holder will be exempt from Dutch withholding tax. Furthermore, United States resident shareholders may be entitled to a full or partial refund of Dutch dividend withholding tax following the policy statement issued by the Dutch Ministry of Finance on 29 April 29, 2016 as referred to above.

In general, the entire dividend (including any amount withheld) will be dividend income to the US holder, and the withholding tax will be treated as a foreign income tax that is eligible for credit against the US holder’s income tax liability or a deduction subject to certain limitations. A “US holder” includes, but is not limited to, a citizen or resident of the United States, or a corporation or other entity organized under the laws of the United States or any of its political subdivisions.

UK resident holders

When Dutch withholding tax applies, a UK-resident holder will generally be subject to Dutch withholding tax at a rate of 15%.

A UK resident holder who is entitled to the benefits of the tax convention between the UK and the Netherlands will be entitled to claim a refund of 5% from the Dutch Revenue. Furthermore, UK resident shareholders may be entitled to a full or partial refund of Dutch dividend withholding tax following the policy statement issued by the Dutch Ministry of Finance on 29 April 29, 2016 as referred to above.

Furthermore, UK resident pension funds, meeting certain defined criteria, may claim a full refund of the dividend tax withheld.

Non-US/UK resident holders

For shareholders who are resident in any other country than the United States or the UK, the availability of a whole or partial exemption or refund of Dutch withholding tax is governed by Dutch tax law and/or the tax convention, if any, between the Netherlands and the country of the shareholder’s residence. Furthermore, non-Dutch shareholders may be entitled to a full or partial refund of Dutch dividend withholding tax following the policy statement issued by the Dutch Ministry of Finance on 29 April 29, 2016 as referred to above.

Note 2 - Dividend Access Mechanism

A dividend access share has been issued by The Shell Transport and Trading Company Ltd (“Shell Transport”) and BG Group Ltd (“BG”) to Computershare Trustees (Jersey) Limited ) as dividend access trustee (“the Trustee”). Pursuant to a declaration of trust, the Trustee will hold any dividends paid in respect of the dividend access shares on trust for the holders of B shares and will arrange for prompt disbursement of such dividends to holders of Class B shares.

Interest and other income earned on unclaimed dividends will be for the account of Shell Transport and BG and any dividends which are unclaimed after 12 years will revert to Shell Transport and BG (as applicable). Holders of B shares will not have any interest in either dividend access share and will not have any rights against Shell Transport and BG as issuers of the dividend access shares. The only assets held on trust for the benefit of the holders of B shares will be dividends paid to the dividend access trustee in respect of the dividend access shares.

The declaration and payment of dividends on the dividend access shares will require board action by Shell Transport and BG (as applicable) and will be subject to any applicable limitations in law or in the Shell Transport or BG (as appropriate) articles of association in effect. In no event will the aggregate amount of the dividend paid by Shell Transport and BG under the dividend access mechanism for a particular period exceed the aggregate amount of the dividend declared by the Royal Dutch Shell Board on the B shares in respect of the same period.

Operation of dividend access mechanism

If, in connection with the announcement of a dividend by the Company on B shares, the Board of Shell Transport and/or the Board of BG elects to declare and pay a dividend on their respective dividend access shares to the Trustee, the holders of B shares will be beneficially entitled to receive their share of those dividends pursuant to the declaration of trust (and arrangements will be made to ensure that the dividend is paid in the same currency in which they would have received a dividend from the Company).

If any amount is paid by Shell Transport or BG by way of a dividend on the dividend access shares and paid by the Trustee to any holder of B shares, the dividend which the Company would otherwise pay on B shares will be reduced by an amount equal to the amount paid to such holders of B shares by the Trustee. The Company will have a full and unconditional obligation, in the event that the Trustee does not pay an amount to holders of B shares on a cash dividend payment date (even if that amount has been paid to the Trustee), to pay immediately the dividend announced on B shares. The right of holders of B shares to receive distributions from the Trustee will be reduced by an amount equal to the amount of any payment actually made by the Company on account of any dividend on B shares. If for any reason no dividend is paid on the dividend access shares, holders of B shares will only receive dividends from the Company directly. Any payment by the Company will be subject to Dutch withholding tax (unless an exemption is obtained under Dutch law or under the provisions of an applicable tax treaty).

The Dutch tax treatment of dividends paid under the dividend access mechanism has been confirmed by the Dutch Revenue Service in an agreement (“vaststellingsovereenkomst”) with the Company and N.V. Koninklijke Nederlandsche Petroleum Maatschappij (Royal Dutch Petroleum Company) dated October 26, 2004, as supplemented and amended by an agreement between the same parties dated April 25, 2005, and a final settlement agreement in connection with the Company’s acquisition of BG dated November 9, 2015. The agreements state, among other things, that dividend distributions on the dividend access shares by Shell Transport and/or BG will not be subject to Dutch withholding tax provided that the dividend access mechanism is structured and operated substantially as set out above.

The Company may not extend the dividend access mechanism to any future issuances of B shares without prior consultation of the Dutch Revenue Service. Accordingly, the Company would not expect to issue additional B shares unless that confirmation from the Dutch Revenue Service were obtained or the Company were to determine that the continued operation of the dividend access mechanism was unnecessary. Any further issue of B shares is subject to advance consultation with the Dutch Revenue Service.

The dividend access mechanism may be suspended or terminated at any time by the Company’s Directors or the Directors of Shell Transport or BG, for any reason and without financial recompense. This might, for instance, occur in response to changes in relevant tax legislation.

The daily operations of the Trust are administered on behalf of Shell by the Trustee. Material financial information of the Trust is included in the “Consolidated Financial Statements” and is therefore subject to the same disclosure controls and procedures as Shell.

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