CRA confirms that “cost” in the branch thin cap rules means original cost

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 this means original acquisition cost, i.e., without deductions for depreciation or other amortization.

The same point would arise in relation to the gross REIT revenue definition, which provides for the deduction of the "cost" of property which has been disposed of.

Neal Armstrong. Summary of 4 June 2014 T.I. 2013-0513761E5 under s. 18(5) – equity amount.