CRA confirms that the “cost” of eligible capital property for thin cap purposes means its original cost rather than cost amount
6 August 2014 - 8:15am
Under the expanded thin cap rules, Canadian branches of non-resident corporations or trusts are limited to debt of 60% of the "cost" of assets used or held in the Canadian activities. CRA has confirmed that the "cost" of eligible capital property means its "original acquisition cost" rather than (amortized) "cost amount." It made essentially the same finding in 2013-0513761E5 respecting depreciable property.
A similar point arises under the gross REIT revenue definition, which provides for the deduction of the cost rather than cost amount of property which has been disposed of.
Neal Armstrong. Summary of 22 July 2014 T.I. 2014-0526631E5 under s. 18(5) – equity amount.