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US stock buyback excise tax – Potential implications for Canadian public companies

|Tax Alerts, Legislation & Policy, National/Federal Taxation|United States, Canada
United States, Canada

  • On 27 December 2022, the United States (US) Internal Revenue Service (IRS) released Notice 2023-2 (the Notice), which provides interim guidance on the application of the new 1% excise tax on repurchases of certain corporate stock under Internal Revenue Code Section 4501.

  • The US excise tax applies to stock repurchases made after 31 December 2022.

  • The Notice could have important implications for Canadian public companies with US affiliates. Many Canadian public companies have active share repurchase…

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