Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
This is in reply to your memorandum of July 6, 1989 in respect of the above-noted subject.
In summary, XXX
The fact that the employer's discontinuance of operations may only be temporary is in our view of no significance by itself in characterizing the payment. The proper test to be applied is whether or not XXX have any form of agreement where under he must be "rehired" upon a subsequent re-start of the company's operations. When such an agreement does not exist, the payment could, subject to our comments below, properly be considered a retiring allowance.
The determination of whether or not an amount is a bonus for fulfilling obligations an d not a retiring allowance will, in our opinion, depend on an analysis of all of the factors relevant to the case. Such factors could be the reasonableness of the amount(s) paid in relation to the services performed, the basis on which an amount is calculated and the contractual obligations of the employee (as discussed above). All factors must be considered together to arrive at a conclusion.
XXX
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1989
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1989
Email this Content