Tax shield ( English Tax Shield ) - the effect that arises from the restructuring of company capital . It consists in the fact that the amount of corporate tax levied on equity is reduced due to an increase in the share of borrowed capital . Trite, tax shields are planned savings on tax payments. In financial management, for example, when planning a lease, tax shields are used: depreciation, interest on loans and rents.
See also
- Capital structure
- Capital restructuring
- Equity
- Borrowed capital