The reduction in taxes made possible by a capital cost allowance (CCA)tax shield equals the amount of the CCA deduction multiplied by the tax rate.

Question

Quizplus · Accepted Answer

This statement is true as the reduction in taxes due to a capital cost allowance (CCA) tax shield is equal to the amount of the CCA deduction multiplied by the tax rate. This is because the CCA deduction reduces the taxable income which in turn lowers the tax liability based on the applicable tax rate.

The Reduction in Taxes Made Possible by a Capital Cost