Voluntary Disclosures Program – Introduction
What is the Voluntary Disclosure Program about?
The Voluntary Disclosures Program (VDP) grants relief on a case by case basis to taxpayers and registrants who voluntarily come forward to fix errors or omissions in their tax filings before CRA knows or contacts them about it.
What kind of relief?
You will have to pay the taxes owing, plus interest (in part or in full) that result from your corrections. However, if CRA accepts your application, you will receive prosecution relief, and in some cases penalty relief and partial interest relief that you would have otherwise needed to pay.
Most Canadians file and pay their taxes in full and on time, and it is important that the relief provided under the VDP be fair and not reward individuals or corporations looking for a way to avoid paying their fair share of taxes. To be fair to all, the CRA grants a higher level of relief to those who are correcting an unintentional error than to those who intentionally avoided paying their taxes.
Who can make an application?
Most taxpayers and registrants can make an application through the Income Tax stream and/or through the GST/HST stream.
The term taxpayer includes, individuals, employers, corporations, partnerships and/or trusts.
The term registrant includes a GST/HST registrant/claimant, an excise duty licensee/registrant, an excise tax licensee, an excise tax refund claimant, an air travelers security charge registrant, a designated air carrier, a registered exporter of softwood lumber products and any other person who is required to report or remit an amount as or on account of tax.
How to apply?
For information on how to apply under the Income Tax stream and the GST/HST stream, as well as what you need to know when and after you apply, refer to the appropriate overview link below:
Should you apply for relief?
The VDP receives applications from a wide range of taxpayers and registrants correcting various tax situations, below are a just a few of these situations. If you find yourself in one of these situations, you may want to take advantage of the program and its benefits:
- A tax return for a previous year was not filed and is now late
- Income was not reported or under-reported on a tax return that is already filed
- Expenses were claimed on a tax return that were not eligible
- Employee source deductions were not submitted (for example, pension plan or employment insurance deductions)
- Required information returns were not filed (for example, Form T1135, Foreign Income Verification Statement)
- Income from foreign sources that is taxable in Canada was not reported on a tax return that is already filed
- GST/HST wasn’t charged, collected, and/or reported for any reporting period
- Ineligible GST/HST input tax credits, refunds or rebates were claimed
- Incomplete information was provided on a return for a reporting period
For more information on situations when relief may be granted, see paragraph 19 of Information Circular, IC00-1R6-Voluntary Disclosures Program. For registrant related disclosures, see paragraph 27 of GST/HST Memorandum 16-5, Voluntary Disclosures Program.
Where else can I ask for relief in the CRA?
There are other options available for you to apply for relief in the CRA. For example, you can apply under the Taxpayer Relief Program (TRP).
For the TRP, you may qualify for relief from penalties and interest if you could not fulfill your tax obligations due to one or more of the following:
- extraordinary circumstances
- errors or delays caused by the CRA
- inability to pay
- financial hardship
- other circumstances beyond your control
For more information on how to apply under the taxpayer relief provisions, go to Cancel or waive penalties or interest.
If relief under the VDP or TRP is not available to you, you may be able to ask for a remission review. Remission is a rare and extraordinary measure which can provide full or partial relief from federal tax, interest, penalty, or other CRA debt in certain circumstances. To find out if your circumstances could be considered for a remission review, go to When to request a remission review.
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