Royal Dutch Shell plc (the ‘company’) announced the start of its $25 billion share buyback programme on July 26, 2018. We subsequently announced on March 23, 2020, that:

  • in light of the current economic and oil price environment, we had decided not to continue with the next tranche of the share buyback programme following the completion of the tranche announced on January 30, 2020;
  • our intention to complete the $25 billion share buyback programme remained unchanged but was not likely to be feasible before the end of 2020; and
  • Shell would continue to monitor the evolving business environment and make decisions on further tranches of the share buyback programme on a quarterly basis.

The purpose of the share buyback programme is to reduce the issued share capital of the company to offset the number of shares issued under the Scrip Dividend Programme and to significantly reduce the equity issued in connection with the company’s combination with BG Group. All shares repurchased to date as part of the share buyback programme have been / will be cancelled.

The share buyback programme is split into different tranches and, the company’s expectation is that, on each tranche a broker will make its trading decisions in relation to the company’s securities independently of the company, within the framework set out in the arrangement with the broker. The shares bought back are intended to be the A ordinary shares traded in the EUR denomination and whichever of the A ordinary shares and/or B ordinary shares traded in the GBP denomination is economically the least expensive for the company on a given trading day.

Any such share repurchases will be effected within certain pre-set parameters, and in accordance with the company´s general authority to repurchase shares granted by its shareholders, Chapter 12 of the Listing Rules and Article 5 of the Market Abuse Regulation 596/2014/EU dealing with buy-back programmes and the Commission Delegated Regulation (EU) 2016/1052.

Tax implications

Dutch tax law treats share buybacks for cancellation as being subject to dividend withholding tax unless an exemption with certain annual quantitative limits applies. This exemption with quantitative limits applies to the A ordinary shares. In line with the Dutch Dividend Withholding Tax Act, the repurchase of the B ordinary shares will potentially give rise to Dutch withholding tax of 15 per cent.

In any event, any withholding tax arising on a buyback of the B ordinary shares would be borne by the company and not the selling shareholder.

Other

For information on the dividend access mechanism and taxation of dividends see "Information on shares".