In TOSI context, CRA considers that “income” means “revenue” and applies a single supply doctrine to incidental provisions of property
Under the split income proposals, dividends or gains from “excluded shares” are excluded from the tax on split income. Subpara. (a)(i) of the excluded share definition requires that at least 90% of the corporation’s "business income" be from the provision of services, and para. (c) requires that "all or substantially all of the income" of the corporation be not derived directly or indirectly from related businesses.
CRA indicated that these references to “business income” and “income” are to gross income rather than net income.
Where the corporation has income from the provision of services and from income from non-services, the two should generally be computed separately. However, CRA apparently considered that where the non-service income was necessary for or incidental to the provision of the services themselves, all of the income would be considered to be services income. This is reminiscent of the single supply doctrine applied on the GST side (see, e.g., OA Brown and, most recently, Intrawest).
It remains to be seen whether CRA ports over the expansive interpretation it has given in the GST context to the concept of a supply of property. For example, it considers (e.g., in 2014 CBAO Roundtable, Q.35) that a fee for a training session or seminar is for the supply of intangible personal property rather than of a service. Or maybe CRA will look more to the M&P and Class 29 cases (see, e.g., Reg Rad, Crown Tire, Canadian Wirevision and Will-Kare).