Income tax – What you need to know

Are you eligible?

Before you contact the Voluntary Disclosures Program (VDP) to correct your taxes, first make sure you are eligible for relief. You may be eligible if you:

  • failed to fulfill your obligations under the Income Tax Act
  • failed to report any taxable income you received
  • claimed ineligible expenses on a tax return
  • failed to remit source deductions
  • failed to file information returns
  • failed to report foreign-sourced income that is taxable in Canada

You are not typically eligible for relief for anything related to:

  • applications related to income tax returns with no taxes owing or with refunds expected
  • elections – there are provisions in the various Acts administered by the Canada Revenue Agency (CRA) which entitle you to choose or elect a specific tax treatment of certain transactions
  • applications related to an advance pricing arrangement
  • applications that depend on an agreement being made at the discretion of the Canadian competent authority under a provision of a tax treaty
  • applications where a person is in receivership or has become bankrupt
  • post-assessment requests for penalty and interest relief (these requests will be considered to be retroactive tax planning)

Second, make sure that your application meets the following five conditions of a valid application. To be valid your application must:

Payment of tax owing

The Canada Revenue Agency (CRA) can only grant you relief from prosecution or from paying penalties. You still have to pay any tax that you owe. Payment of the estimated taxes owing will be required as a condition to qualify for the VDP.

If you do not have the ability to make payment at the time of filing a VDP application, you may ask to be considered for a payment arrangement on Form RC199, Voluntary Disclosures Program (VDP) Application. To learn more about your payment options, go to Make a Payment to the Canada Revenue Agency.

If you are paying by cheque, make your cheque payable to "Receiver General for Canada" and write your SIN or Business Number on the front of your cheque. If you are making more than one submission (i.e. individual and business) in the same application, include one cheque for each submission.

Note: Do not send cash by mail.

Disclosed information

The information you disclose may be referred to another CRA program area and we can later audit or verify any information for any tax year relating to your voluntary application. Also, the CRA can reassess any tax year, not just those included in your application, and if the CRA finds that you misrepresented the facts because of neglect, carelessness, willful default, or fraud, the CRA will cancel any relief granted as part of the VDP.

Pre-disclosure discussion

As of March 1, 2018, the 'no-name' disclosure method has been replaced with the pre-disclosure discussion service. To have qualified for relief on a no-name disclosure basis under the VDP, the CRA would have had to receive your application, including your name, on or before February 28, 2018.

If you are unsure if you want to proceed with an application, you can use the pre-disclosure discussion service to participate in preliminary discussions about your situation on an anonymous basis to get insight into the VDP process, a better understanding of the implications of updating your income tax affairs in order to meet your obligations, and the relief available under the VDP.

Pre-disclosure discussions with a CRA official are for your benefit; they are informal, non-binding, and may occur before your identity is revealed. These discussions do not constitute acceptance into the VDP and have no impact on CRA's ability to audit, penalize, or refer a case for criminal prosecution.

For complex technical reporting issues or questions, you will be referred to a CRA official in a specialized audit area to discuss your situation on an anonymous basis.

To speak with a CRA official, contact General Enquiries:

  • Individuals (Canada and the United States): 1-800-959-8281
  • Businesses (Canada and the United States): 1-800-959-5525

For all other telephone numbers, go to Telephone numbers – Canada Revenue Agency.

How many times can you apply?

After applying to the program, the CRA expects you to keep your taxes up to date. The CRA may consider reviewing your file a second time in situations where the circumstances are beyond your control.

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