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vriguy (65.38)

UN vs UL?

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July 06, 2012 – Comments (1) | RELATED TICKERS: UN , UL

Unilever is available to US investors as ADRs under the UN and UL tickers, respectively the Amsterdam and London stock exchanges listings. As I understand the two have equal voting and dividends/share rights, yet the two always trade about 20 to 40 cents apart.

I'm sure the spot Euro vs. GB pound vs US dollar exchange rates differentials are responsible for part of the difference. My question: is there a difference in the net taxes I'll pay on dividends I get from UN vs UL? If not, it makes sense to always buy the cheaper of the two ADRs.

I also see a similar phenomenon with Royal Dutch Shell which has RDS.A and RDS.B, so this question has broader applicability.

Any guidance from the many knowledgeable folk here is appreciated.  Thank you

1 Comments – Post Your Own

#1) On February 15, 2018 at 12:37 PM, MFt2t (< 20) wrote:

This came up while looking for this after finding the answer on SeekingAlpha was partly detailed but the final answer was blocked except for premium members.  This simple answer requires payment?

 As you probably found the answer long ago, this might help others.

To avoid complexity it is easist just to consider UL as the British ADR, whil UN is the Dutch ADR. As of 2011 (I would presume by the link name "http://topforeignstocks.com/2011/01/23/withholding-tax-rates-by-country-for-foreign-stock-dividends/), British withholding was 0% while Dutch (Netherlands) withholding was 15%. 

Generally you get up to 15% tax credit from the US for foreign tax withheld so this would result in the same outcome from taxes, assuming Uncle Sam taxed your dividends at the 15% qualified rate. 

If not qualified, then the difference between Uncle's rate and the foreign withholding would be payable to your trusty Uncle.  I encountered this with NOV, the dividends for which I had 26% withheld.  As that country's withholding rate was supposedly 25%, I presumed the "extra" 1% was due to the difference between the Euro and the Buck. 

Taxing duties these are, says Yoda!  Haha.

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