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21 November 2025

BREAKING TAX NEWS | Treasury releases final regulations on excise tax on stock buybacks

On November 21, 2025, Treasury and the IRS released final regulations (TD 10037) on the stock-buyback excise tax. Among other important changes, the final regulations:

  • Withdraw the "funding rule," which would have imposed the excise tax on repurchases of stock by foreign corporations to the extent those purchases were "funded" (broadly defined) by domestic subsidiaries of those foreign corporations
  • Exclude certain repurchases that occur (or are deemed to occur) in acquisitive reorganizations, "take private" transactions and certain other M&A transactions
  • Expand exemptions for redemptions of certain preferred stock

A Tax Alert is forthcoming.

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2025-2344

 

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