Improving the integrity of off-market share buy-backs

On 25 October 2022, as part of the 2022–23 Budget, the government announced it will improve the integrity of the tax system by aligning the tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs.

The proposed measure will prevent any part of the buy-back price being treated as a dividend. Instead, the entire buy-back price will be treated as capital proceeds. The announcement also includes changes in respect of selective share cancellations to ensure alignment across capital management activities for listed public companies.

This measure is not yet law.

Administrative treatment

Once enacted, the measure will apply to off-market share buy-backs carried out by listed public companies made on or after 7:30 pm AEST 25 October 2022.

If you are a listed public company that has entered into, or are contemplating entering into an off-market buy-back which might be within the scope of the announced measure, we encourage you to discuss your situation with us.

Email PGIAdvice@ato.gov.au.

For more information see:

• 2022–23 Budget, Paper No. 2 (PDF, 2.25MB)This link will download a file
• Treasury Laws Amendment (2023 Measures No. 1) Bill 2023External Link