Would a tax on gross revenue qualify as an income or profits tax? CRA stated:
[W]e will generally accept that tax paid to a foreign country will be an income or profits tax notwithstanding that it is computed by reference to gross revenue if the tax is part of a comprehensive income tax regime and is tightly linked and subordinate to a tax that is computed by reference to income or profits… .The following factors would be considered indicative…:
* a single tax statute contains the option to pay tax on gross income or tax on net income;
* there is the ability to elect annually between the two taxation regimes; and
* the rate of tax applied on net income is not unreasonably high.
When all of the above factors are present… [we would] accept that it is an income or profits tax