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Voluntary Disclosures Program (VDP)

Income Tax Act s. 220(3.1)

Changes to the VDP that take effect on October 1, 2025 will make it less restrictive and more accessible. The revised program allows for up to 100% relief from penalties and partial relief from interest. If relief is provided, a taxpayer will not be referred for criminal prosecution.

What is NOT a Voluntary Disclosure

VDP General (Unprompted) Relief

VDP Partial (Prompted) Relief

Situations Eligible For VDP

VDP Application Conditions

Making a Voluntary Disclosure

Pre-Disclosure Discussion

Request for Review of CRA Decision

Other Resources Re Voluntary Disclosure

TaxTips.ca Resources

Canada Revenue Agency (CRA) Resources

What is NOT a Voluntary Disclosure

No relief will be provided unless an application is considered voluntary. It will not be considered voluntary if an audit or investigation has already been started against the taxpayer or a related taxpayer regarding the information being disclosed. This includes audit or investigations by the CRA, a law enforcement agency, securities commission, or other federally or provincially regulated authority.

General (unprompted) or partial (prompted) relief may be granted for voluntary disclosures.

VDP General (Unprompted) Relief

General relief will be provided for applications that are considered unprompted. This includes:

applications made when no verbal or written communication has been provided about a compliance issue included in the disclosure
applications made after receipt of an education letter or notice offering general guidance and filing information related to a particular target.

General relief provides for 75% relief of applicable interest and 100% relief of applicable penalties.

VDP Partial (Prompted) Relief

Partial relief will be provided for applications that are considered prompted. This includes:

applications made after some verbal or written (excluding education letters) communication has been provided about an identified compliance issue related to the disclosure. The communication may include notification about a specific error or omission, or it may include a deadline by which the taxpayer must comply.
applications made following receipt by CRA from a third party regarding potential involvement in tax non-compliance.

Partial relief provides for 25% relief of applicable interest and up to 100% of applicable penalties.

Situations Eligible For VDP

Taxpayers can voluntarily correct inaccurate, incomplete, or unreported information, and do so with relief of up to 100% of penalties or prosecution, if a valid disclosure is made to Canada Revenue Agency (CRA).

Disclosures can be made for the purposes of failure to fulfill obligations regarding:

income tax
GST/HST
withholding taxes
employee source deductions
information returns, such as Form T1135, Foreign Income Verification Statement
excise duties under the Excise Tax Act, 2001
excise taxes under the Excise Tax Act
the fuel charge under Part I of the Greenhouse Gas Pollution Pricing Act
the luxury tax under the Select Luxury Items Tax Act
the underused housing tax under the Underused Housing Tax Act,
the digital services tax under the Digital Services Tax Act (this has been rescinded)
charges under the Softwood Lumber Products Export Charge Act, 2006, or
charges under the Air Travellers Security Charge Act

VDP Application Conditions

A valid application must meet all of the following 5 conditions. The disclosure:

is voluntary
is complete, with all supporting documents included
includes an error or omission with applicable interest charges, penalties, or both
includes information that is more than one year overdue
includes payment of the estimated tax owing, or requests a payment arrangement (subject to CRA approval)

If CRA accepts the disclosure as valid, taxes will still be payable.

See Who is eligible on the CRA website for more information on who can make an application, and situations that may be eligible.

Making a Voluntary Disclosure

Form RC199, Taxpayer Agreement - Voluntary Disclosures Program, should be completed in order to make a voluntary disclosure. It is important to use this form. The form can be submitted by the taxpayer, or by an authorized representative. The completed application can be sent either electronically, (My Account, My Business Account, or Represent a Client), or by mail or fax. For more information see How to apply and Where to submit an application, both in IC00-1R7.

VDP Pre-Disclosure Discussion

Taxpayers who are unsure whether they want to proceed with a disclosure can participate in a pre-disclosure discussion on a no-name (anonymous) basis, but this does not apply to applications which would be done under the Limited Program. This allows discussions with a VDP officer which are non-binding and general in nature, without revealing the identity of the taxpayer. Using this method, the VDP officer can confirm that there is nothing in the information provided that would immediately disqualify the taxpayer from further consideration under the VDP. However, a final determination cannot be made until the identity of the taxpayer is known and all facts related to the 4 validity conditions have been verified.

See Pre-disclosure discussion in IC00-1R7.

Request for Review of CRA Decision

A second review may be requested by a taxpayer if they disagree with a VDP decision, and an application for a judicial review can be made.

See Right of redress for taxpayers in IC00-IR7.

Other Resources Re Voluntary Disclosure

Canadian Tax Lawyer Analyzes Tax Voluntary Disclosure Programs Around The World - Part II: The Canadian Voluntary Disclosure System by David Rotfleisch, Rotfleisch & Samulovitch P.C. This article was written prior to the changes that take effect October 1, 2025.

TaxTips.ca Resources

Taxpayer Relief Provisions

Canada Revenue Agency (CRA) Resources

Voluntary Disclosures Program

IC00-1R7, Voluntary Disclosures Program - for applications received on or after October 1, 2025

IC00-1R6, Voluntary Disclosures Program - for all voluntary disclosure applications received on or after March 1, 2018.

IC00-1R5, Voluntary Disclosures Program - archived, superseded by IC00-1R6

GST/HST Memoriandum 16-5-1, Voluntary Disclosures Program - for applications received on or after October 1, 2025

GST/HST Memorandum 16-5 Voluntary Disclosures Program

December 15, 2017 news release re March 1, 2018 changes

Tax Tip: If you think you need to do a Voluntary Disclosure, seek professional advice!

Revised: September 13, 2025