Voluntary Disclosures: Changes to the Program

Posted on December 18th, 2025 in Domestic Tax

The Voluntary Disclosures Program (VDP) provides taxpayers with a chance to correct past tax errors or omissions before CRA finds them. If CRA accepts a disclosure, taxpayers may receive some penalty and interest relief and will not be referred for criminal prosecution. Any taxes owing will still have to be paid by the taxpayer in full.

The VDP has been significantly changed, effective for disclosures submitted on or after October 1, 2025.

Types of disclosures

Under the new VDP, applications will be considered either prompted or unprompted.

Unprompted applications

An application will generally be considered unprompted when there has been no communication (verbal or written) about an identified compliance issue related to the disclosure, or when the application follows an education letter or notice that offers general guidance and filing information related to a particular topic.

Unprompted applications will normally be eligible for 75% relief of applicable interest and 100% relief of applicable penalties (referred to by CRA as general relief).

Prompted applications

An application will generally be considered prompted when it follows verbal or written communication about an identified compliance issue related to the disclosure. Such communications could include letters or notices (excluding education letters) to the taxpayer with one or more of the following:

• identification of a specific error or omission found on the taxpayer’s account; or
• a deadline to correct an error or omission, where there is an expectation for the taxpayer to file or comply.

An application made after CRA has received information from third party sources regarding the potential involvement of a specific taxpayer (or of a related taxpayer) in tax noncompliance would also generally be considered prompted.

Prompted applications will normally be eligible for 25% relief of applicable interest and up to 100% relief of applicable penalties (referred to by CRA as partial relief).

All applications

For both prompted and unprompted applications, neither gross negligence penalties nor criminal prosecution will be applied.

VDP eligibility

In order to be eligible for relief, an application must meet all of the conditions discussed in this article.

Voluntary

An application is not voluntary if an audit or investigation has been initiated against the taxpayer or a related taxpayer in respect of the information being disclosed. Audits or investigations are not limited to those conducted by the CRA, but can also be conducted by a law enforcement agency, securities commission or other federally or provincially regulated authority.

Past due

For income tax disclosures, the application must include information that relates to a tax year that is at least one year past the filing deadline. For disclosures related to GST/HST or various other taxes, duties and charges, the application must include information that relates to a reporting period that is at least one period past the filing deadline.

Interest or penalties

The application must include an error or omission subject to interest charges, penalties, or both. Prior to these changes, only applications to which penalties were applicable were eligible.

Supporting documents included

The taxpayer must provide all relevant information for all required tax years and respond comprehensively and promptly to all CRA requests for information. Taxpayers must disclose all known errors and omissions in their tax obligations, including any arm’s length and non-arm’s length transactions or circumstances relating to the errors and omissions.

Supporting documentation (including returns, forms, statements and schedules) needed to correct the non-compliance for the most recent six years must be included with the application. However, if the errors or omissions relate to assets or income that are located outside Canada, this period is increased to the most recent ten years.

Disclosures related to the matters included in the GST/HST memorandum require documentation for the most recent four years. Documentation for tax years beyond these timeframes may be requested at CRA’s discretion.

Payment

Either payment or a request for a payment arrangement must be made for any estimated tax owing. There is no guarantee that CRA will allow a payment arrangement. These requests will be reviewed by CRA collections officials.

Subsequent submissions

Applicants are expected to remain compliant after being granted relief under the VDP. However, CRA may consider a subsequent application if the circumstances are beyond the person’s control or the new application is related to a different matter than a previous application.

If there have been any errors or omissions in tax reporting, consider making a voluntary disclosure. CRA’s access to information from third parties (such as online rental and sales platforms) has increased significantly in recent years.