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Share Buybacks and Redemptions: Tax Issues

Wednesday, October 23, 2019

This article first appeared in Irish Tax Review, Vol. 32 No. 3 (2019) © Irish Tax Institute.

The purchase by a company of its own shares is one of the most common methods of exiting a business. Two separate pieces of legislation are relevant: the Companies Act 2014 (CA 2014), which sets out the legal procedure to effect and authorise a purchase by a company of its own shares; and the Taxes Consolidation Act 1997 (TCA 1997), which sets out the parameters under which the monies received on the purchase or redemption can be treated as a capital receipt rather than an income distribution.

This article by Partner Amanda-Jayne Comyn is the second of a two-part series. The first part provided a legal update on share buybacks and redemptions, and this part reviews the principal provisions relating to the tax treatment of a purchase by a company of its own shares.

Full article available here.