On December 27, 2022, the U.S. Department of the Treasury and the Internal Revenue Service issued Notice 2023-2 (the Notice), announcing their intention to issue proposed regulations addressing the application of the new one percent excise tax on certain stock repurchases and economically similar transactions undertaken by publicly traded U.S. corporations and certain foreign corporations. The Notice serves as interim guidance that may be relied upon by taxpayers pending issuance of final regulations.

Our recently published Client Alert provides a detailed discussion of the interim guidance, including in relation to the scope of covered repurchases relevant to certain M&A and capital markets transactions (including accelerated share repurchase transactions), the “netting” rule, the statutory exception for repurchases treated as a dividend for U.S. tax purposes, and the proposed reporting form.