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<strong>IRG</strong>-WG RA (<str<strong>on</strong>g>07</str<strong>on</strong>g>) <strong>WACC</strong> Master Doc<br />
A further point to c<strong>on</strong>sider is that the difference between effective and headline rate derives<br />
from the tax allowance regime and the capital structure that the company chooses. 17 This<br />
choice should be reflected in the allowable cost of capital, namely when there are different<br />
tax rates for equity and debt.<br />
PIB 9:<br />
Estimating of the tax rate should give due c<strong>on</strong>siderati<strong>on</strong> to the company’s effective tax<br />
rate and any specific attributes which give rise to a likely permanent difference to the<br />
headline tax rate.<br />
17<br />
Regarding the tax allowance regime the NRA must check <strong>on</strong> whether this still gives the right<br />
ec<strong>on</strong>omic signals as tax allowance schemes may pursue other objectives and can distort decisi<strong>on</strong>s.<br />
24
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