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Voluntary Disclosures Program

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Filing Your Return -> Voluntary Disclosures Program

Voluntary Disclosures Program (VDP)

Income Tax Act s. 220(3.1)

Changes to the VDP took effect on March 1, 2018.  VDP applications relating to income tax disclosures may now fall into one of two programs - the General Program or the Limited Program.

VDP General Program

Applications that fall under the General Program, if accepted under the VDP, will be eligible for penalty relief and partial interest relief.

VDP Limited Program

A new "Limited Program" now applies to taxpayers who have intentionally avoided their tax obligations.  See the December 15, 2017 news release.  The new Limited Program:

    - requires payment of the estimated taxes owing as a condition to qualify for the program;

    - cancels relief if it is subsequently discovered that a taxpayer's application was not complete due to a misrepresentation; and

    - eliminates the process for taxpayers and authorized representatives to make disclosures on a no-names basis.

VDP Applications

Taxpayers can voluntarily correct inaccurate, incomplete, or unreported information, and do so without penalties or prosecution, if a valid disclosure is made to Canada Revenue Agency (CRA).

Disclosures can be made for the purposes of:

bullet Income Tax
bullet Goods and Services Tax/Harmonized Sales Tax (GST/HST)
bullet charges under the Softwood Lumber Products Export Charge Act, 2006, or
bullet Air Travellers Security Charge Act

A valid disclosure must meet the following 4 conditions.  The disclosure:

bullet must be voluntary
bullet must be complete
bullet must involve the application or potential application of a penalty, and
bullet must include information that is more than one year overdue

A disclosure will not be considered a voluntary disclosure if the taxpayer is aware that CRA is about to do an investigation regarding the information to be disclosed, or if CRA has already contacted the taxpayer with a request for information that would uncover the information to be disclosed.

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

Making a Voluntary Disclosure

Form RC199, Taxpayer Agreement - Voluntary Disclosures Program, should be completed.  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.  For more information see IC00-1R6 (link below).

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.

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.  If the VDP results in an assessment or reassessment with which the taxpayer disagrees, a Notice of Objection can be filed.

CRA Resources:

    - Voluntary Disclosures Program

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

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

    - GST/HST Memorandum 16-5 Voluntary Disclosures Program

See also:

Taxpayer Relief Provisions

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

Revised: August 21, 2018

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