US stock buyback excise tax has potential implications for Canadian public companies

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16 February 2023

US stock buyback excise tax has potential implications for Canadian public companies

The US Internal Revenue Service (IRS) released Notice 2023-2 (the Notice) on December 27, 2022, which provides interim guidance on the application of the new 1% excise tax on repurchases of certain corporate stock under IRC Section 4501. The Notice also announces that the Treasury Department and the IRS intend to issue proposed regulations on the application of the new rules. The US excise tax applies to stock repurchases made after December 31, 2022.

A Tax Alert prepared by Ernst & Young Canada, and attached below, provides additional details.

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ATTACHMENT

Full text of Tax Alert

Document ID: 2023-0304

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