Earn your certification as a Financial Modeling & Valuation Analyst (FMVA)®. Register today!

Tax Shield Example Template

Tax Shield Example Template

This tax shield example template shows how interest tax shield and depreciated tax shield are calculated.

Here is what the tax shield example template looks like:

Tax Shield Example Template Screenshot

 

Download the Free Template

Enter your name and email in the form below and download the free template now!

Tax Shield Example Template

Download the free Excel template now to advance your finance knowledge!

 

A Tax Shield is an allowable deduction from taxable income that results in a reduction of taxes owed. Tax shields differ between countries and are based on what deductions are eligible versus ineligible. The value of these shields depends on the effective tax rate for the corporation or individual (being subject to a higher rate increases the value of the deductions). Common expenses that are deductible include depreciation, amortization, mortgage payments and interest expense. There are cases where income can be lowered for a certain year due to previously unclaimed tax losses from prior years.

To increase cash flows and to further increase the value of a business, tax shields are used. The effect of a tax shield can be determined using a formula. This is usually the deduction multiplied by the tax rate.

Tax Shield = Deduction x Tax Rate

 

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation and Word document templates.

  • Excel Modeling Templates
  • PowerPoint Presentation Templates
  • Transaction Document Templates

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!