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.

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This statement is true. The capital cost allowance (CCA) deduction reduces taxable income, which in turn reduces the taxes owed. The amount of tax savings is equal to the CCA deduction multiplied by the applicable tax rate.

The Reduction in Taxes Made Possible by a Capital Cost