Share repurchase tax rate

[koos2]

What are the tax implications for a company that does a share repurchase, ie what rate is the effective rate that the company pays on the income used by it for a shae repurchase , 28%? Thanks!

[AJ_]

there is no tax consequence(except for the STT) since the company will utilise excess cash.

[#3]

Will they be subject to STT though, I thought STT was replaced by WHT on the recipient. So good question - I would also like to know the answer - since WHT doesn't apply, and STT is done away with.

[AJ_]

STT = Security Transfer Tax payable by purchaser of shares calculated at 0.25% of the purchase price Dividend Tax = not applicable

[#5]

I meant STC - apologies

[koos2]

but the company is holding the shares, they did not reduce the total outstanding shares, does the company pay dividend tax on the shares for every dividend thereafter?

[AJ_]

when a company buys back its own shares, the number of issued shares is reduced. This has no impact on any tax except for STT (Security Transfer Tax) @ 0.25%. Furthermore the cash flow is negatively affected on account of the share repurchase.

[koos2]

Thanks!