Monday, September 15, 2025

Canada Set To Implement Stock Buyback Tax On Jan 1, 2024

The Canadian government is finally set to implement a tax on share buybacks, as announced originally in 2022. Within its 2023 budget, Trudeau’s Liberal government has created the framework for which that tax will be implemented.

Share buybacks are set to be conducted at a rate of 2% of the net value of all share repurchases conducted by corporations in Canada. The measure applies to Canadian-resident corporations whom are publicly listed, but the measures exclude mutual funds.

For clarity, the budget outlines that the tax will also apply to REIT’s, as well as specified investment flow-through trusts and SIFT partnerships.

The 2% tax is to be calculated based on the fair market value of the equity repurchased, less the fair market value of equity issued from treasury, with the tax applied on an annual basis, in line with a corporations taxation year. The rule is set to include normal course issuer bids as well as substantial issuer bids, with exemptions in place for debt-like preferred shares and units, and certain situations related to reorganizations and acquisitions, including amalgamations.

The tax however will not apply if less than $1.0 million in equity is repurchased in the year.

The new rule is set to come into force on January 1, 2024.


Information for this briefing was found via sources mentioned. The author has no affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

Democrats Unveil Tax on Stock Buybacks

The Democrats are preparing to bring back a law that would slap a tax on...

Saturday, August 6, 2022, 01:16:00 PM