What is the Voluntary Disclosure Program (VDP)?
The CRA Voluntary Disclosure Program grants relief to taxpayers who voluntarily omitted or made an error on their tax returns. In the program, taxpayers can
The Canada Revenue Agency (CRA) implemented significant updates to the Voluntary Disclosures Program (VDP) for applications received on or after October 1, 2025.
The main goal of the changes is to simplify the process, expand eligibility, and offer more clarity and relief. Here is SDG Accountant LLC explaining in detail the changes to the Voluntary Disclosure Program and more:
Related Read:
🔑 Key Changes to the Voluntary Disclosures Program (VDP)
The previous “General” and “Limited” programs have been replaced by a two-tier system based on whether the disclosure was “unprompted” or “prompted” by the CRA.
| Relief Tier | Applies to: | Interest Relief | Penalty Relief |
|---|---|---|---|
|
General Relief |
Unprompted applications (i.e., made before any contact by the CRA regarding the specific issue). |
75% relief of applicable interest. |
100% relief of applicable penalties. |
|
Partial Relief |
Prompted applications (i.e., made after a CRA communication about an identified compliance issue, but before an audit or investigation is initiated). |
25% relief of applicable interest. |
Up to 100% relief of applicable penalties. |
🔎 Other Notable Updates
- Expanded Eligibility: The threshold for what constitutes “involuntary” has been lowered. A taxpayer is now generally only ineligible if an audit or investigation has already been explicitly initiated regarding the information being disclosed. Routine education letters or general notices no longer automatically disqualify an applicant.
- Simplified Application: A new, streamlined application form (Form RC199) is required.
- Clarified Documentation Requirements: The CRA has clarified the number of years for which supporting documentation must be provided, depending on the nature of the issue:
- Foreign-sourced income/assets: Most recent 10 years.
- Canadian-sourced income/assets: Most recent 6 years.
- GST/HST matters: Most recent 4 years.
- Removal of Revenue Threshold: The rule that generally restricted large corporations (with gross revenue over $250 million) to the most limited relief category has been eliminated, making them eligible for the more generous General Relief tier.
- Second Applications: The rules for submitting a second VDP application have been relaxed.
These changes are generally seen as making the program more accessible and encouraging more taxpayers to correct past errors or omissions voluntarily.
The revised policy is a positive development and is likely to prompt more taxpayers to come forward voluntarily. That said, meeting the program’s technical requirements remains crucial, and working with an experienced Toronto tax accountant can be highly beneficial during the disclosure process. Taxpayers should obtain legal advice before starting a voluntary disclosure, and our cross-border tax experts at SDG Accountants are ready to assist.
Need help navigating these changes? Were here to help.
Changes to services can often lead to confusion or frustration. If you're struggling to reach a CRA agent and have tax inquiries, our Toronto tax specialists are here to assist. SDG Accountant can address your tax concerns, support you during the filing process, or handle the filing for you entirely.
Start My Tax Prep📍 Bottom Line
SDG Accountants‘ tax litigation and dispute resolution team has a proven history of successfully representing both individuals and businesses in challenges to tax assessments and reassessments at the federal, provincial, and municipal levels. If you suspect mistakes or omissions in earlier returns — or have been contacted by the CRA about possible issues — please connect with the Toronto Accountant team to review your circumstances. We provide practical, affordable, and tailored guidance and representation.
The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situations.
— Sami Ghaith
CPA, CGA, MBA
Share Now
Contact
Get In Touch
News Feeds
