REVENUE CANADA TAXATION 
 
INTERPRETATION BULLETIN 
 
NUMBER: IT-196R2 
 
DATE: MAY 25, 1984 
 
SUBJECT: SPECIAL RELEASE 
PAYMENTS BY EMPLOYER TO EMPLOYEE 
 
REFERENCE: Paragraph 3 should be replaced with the following: 
 
3. On the other hand, that part of a payment in excess of the amount thereof 
that can reasonably be regarded as having the nature and quality of salary, 
wages, commissions, etc., that is compensation for something else, other than 
a covenant not to compete, as mentioned in 1 above, may not be taxable under 
section 5. However, the excess, if received in respect of a termination of 
employment may represent a retiring allowance under subparagraph 56(1)(a)(ii). 
If received in respect of employment which was terminated before November 13, 
1981, it may represent a termination payment under subparagraph 56(1)(a)(viii) 
as it formerly read. See IT-337R2 and IT-365R for the Department's general 
views on the treatment of such amounts which may be received in respect of a 
termination of employment, including an amount received for the breach of an 
employment contract.