What is the CRA’s Voluntary Disclosures Program? – Money sense

The tax liability still applies, but “in fairness to all, the CRA grants a higher level of relief to those who correct an error before being contacted than to those who correct errors after being prompted by notices from the CRA or other administrative authority.”

How to download quality for the VDP

There are five primary conditions for the VDP. The disclosure must:

1. Be voluntary
2. Include information that covers a tax year/reporting period that is at least one year/reporting period past the due date
3. May involve the application of a penalty or interest
4. Please include any known errors or omissions
5. Add a payment or payment arrangement request

Recent changes to the VDP

On October 1, 2025, new guidelines came into effect affecting disclosures related to income tax, sales tax, withholding tax, excise taxes and various other taxes.

The application form has been simplified. The four page Form RC199, application for the Voluntary Disclosures Program (VDP). may be completed by a taxpayer or his authorized representative. It contains a brief description of the facts relating to the omission or error.

The filer must also arrange for payment of any tax owed or request a payment arrangement to be discussed with a CRA collection officer.

Eligibility is also extensive; if a communication from a credit rating agency about a potential non-compliance issue triggers disclosure, it may still be accepted. This differs from past practice. As a result, a CRA education letter about ineligible deductions or unreported income may not prevent a taxpayer from taking advantage of the VDP.

What are the exemption provisions?

There are two levels of relief that may apply to taxpayers filing a VDP application:

1. General relief. This is for those who voluntarily come forward without a nudge from CRA. CRA may waive all penalties and 75% of interest on the balance due.
2. Partial lighting. An application filed by CRA can still benefit from a full waiver of fines. However, only 25% of the resulting interest will be waived if a CRA communication leads to the VDP application.

What should you do if you made a mistake when filing your tax return?

If you overlooked unreported income, over-withholdings, or election returns, among other tax filing errors, you should try to correct these errors as soon as possible.

An unsolicited VDP request can be less painful from an interest perspective and help you sleep better at night if you are aware of a mistake. Although you can file a VDP yourself, if you do your own taxes, consider seeking professional help for a situation like this.

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