IC00-1R7 - Voluntary Disclosures Program

This version is only available electronically.

September 10, 2025

What is the Voluntary Disclosures Program

1. The Voluntary Disclosures Program (VDP) is an opportunity for taxpayers to inform the Canada Revenue Agency (CRA) about and correct errors or omissions in their tax obligations. If relief is provided by the CRA under the VDP, a taxpayer 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.

2. The VDP aims to provide relief that is fair and is not intended to reward non-compliance. In other words, a taxpayer that follows the rules should not be worse off economically than a taxpayer who uses the VDP. The VDP is not intended to serve as a vehicle for taxpayers to intentionally avoid their legal obligations under legislation administered by the CRA.

How is the Voluntary Disclosures Program applied

3. The purpose of this information circular is to help taxpayers understand how the VDP works, including who can apply, how to apply, what relief can be expected, and how the CRA evaluates an application.

4. The VDP applies to disclosures relating to income tax, the GST/HST, withholding taxes, excise duties under the Excise Act, 2001, excise taxes under the Excise Tax Act, the fuel charge under Part I of the Greenhouse Gas Pollution Pricing Act, the luxury tax under the Select Luxury Items Tax Act, the underused housing tax under the Underused Housing Tax Act, the digital services tax under the Digital Services Tax Act, tax under the Global Minimum Tax Act, as well as charges under the Air Travellers Security Charge Act and the Softwood Lumber Products Export Charge Act, 2006.

5. This information circular provides information on the discretionary authority of the Minister of National Revenue (Minister) to grant relief from any penalty or interest under subsection 220(3.1) of the Income Tax Act. These authorities are delegated to designated CRA officials. Unless otherwise specified, all legislative references in this information circular relate to the Income Tax Act.

6. GST/HST Memorandum 16-5-1, Voluntary Disclosures Program, provides information on the discretionary authority of the CRA under the other legislations listed above.

7. The information in this information circular is intended to be used as a guide only. It is not exhaustive, and is not meant to restrict the spirit or intent of the legislation, or to unduly limit the CRA's discretion with respect to the VDP. The CRA is not required to grant relief for all applications made to the VDP. Each request will be reviewed and decided on its own merits. In exercising discretion, the CRA is guided by principles of procedural fairness, which require decisions to be made in good faith, in a manner that promotes the objects of the Income Tax Act.

Types of relief available

8. If the VDP relief is granted, there are three main benefits a taxpayer may receive:

• penalty relief
• interest relief
• no referral for criminal prosecution for the issue(s) disclosed

9. The exact amount and/or type of relief will vary depending on the nature of the disclosure.

Application process

Who can apply

10. Any taxpayer can apply to the VDP to disclose errors or omissions in their tax obligations. However, the following conditions must be met to qualify for relief:

• The application is eligible, which means that:
  • the application is voluntary (go to Determination of voluntary)
  • the application includes information that relates to a tax year that is at least one year past the due date for filing
  • the application includes an error or omission with applicable interest charges, penalties, or both
• All supporting documents are included, which means that:
  • the taxpayer provides all relevant information for all required tax years and responds comprehensively and promptly to all CRA requests for information (go to What to include)
• Payment or a request for a payment arrangement is made for the estimated tax owing, if it applies

11. Under certain circumstances, a taxpayer will not be eligible for relief under the VDP. Examples of such circumstances include the following:

• the application relates to returns resulting in a refund, or with no taxes or penalties owing
• the taxpayer is seeking relief on existing penalties and/or interest, that have already been assessed
• the application seeks to make or alter an election under an act administered by the CRA
• there is an insolvency event for the years involved in the disclosure
• the application relates to matters covered under an advance pricing arrangement with the CRA, or any other tax administration within or outside Canada
• the application depends on an agreement being made at the discretion of the Canadian competent authority under a provision of a tax treaty

12. Taxpayers must remain compliant after being granted relief under the VDP. The CRA may consider a subsequent application from the same taxpayer if the circumstances are beyond the taxpayer's control or related to a different matter than a previous application.

Pre-disclosure discussion

13. A taxpayer that is unsure if they want to proceed with a VDP application is given an opportunity to participate in preliminary discussions about their situation on an anonymous basis to gain:

• insight into the VDP process
• a better understanding of the risks involved in remaining non-compliant
• a better understanding of the relief available under the VDP

14. Such discussions with a CRA official are for the benefit of the taxpayer; they are informal and non-binding.

15. For more information, go to Need more information.

Determination of voluntary

16. The VDP application must be voluntary in order to be granted relief.

17. 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. In the VDP context, audits or investigations are not limited to those conducted by the CRA. They can also be conducted by a law enforcement agency, securities commission, or other federally or provincially regulated authority.

18. Voluntary applications are eligible for general (unprompted) or partial (prompted) relief. Refer to Levels of relief.

Unprompted application

19. An application is generally considered unprompted in the following situations:

• an application is made when there has been no communication (verbal or written) about an identified compliance issue related to the disclosure
• an application is made following an education letter or notice that offers general guidance and filing information related to a particular topic

Prompted application

20. An application is generally considered prompted in the following situations:

• an application is made following verbal or written communication about an identified compliance issue related to the disclosure, which may include letters or notices (excluding education letters) to the taxpayer with one or more of the following:
  • an identification of a specific error or omission found on the taxpayer's account
  • a deadline to correct an error or omission, where there is an expectation for the taxpayer to file or comply
• an application is made after the CRA has already received information from third party sources regarding the potential involvement of a specific taxpayer (or of a related taxpayer) in tax non-compliance

Levels of relief

21. Based on the Determination of voluntary, the CRA will evaluate whether the taxpayer qualifies for general or partial relief:

• Unprompted applications are normally eligible for general relief and will receive 75% relief of the applicable interest and 100% relief of the applicable penalties.
• Prompted applications are normally eligible for partial relief and will receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties.

22. If a VDP application is eligible for relief, protection from prosecution will be granted, and gross negligence penalties will not apply on the information disclosed.

23. Relief is provided in line with the limitation period for relief of penalties and interest found under subsection 220(3.1) of the Income Tax Act. For more information, go to Limitation period on exercising discretion and the deadline for requesting relief.

How to apply

What to include

24. To apply to the VDP, taxpayers must complete Form RC199, Voluntary Disclosures Program (VDP) Application.

25. A taxpayer may choose to use an authorized representative to submit the application on their behalf. The CRA can only discuss and provide a taxpayer's information to the taxpayer or their authorized representative. Go to Authorize a representative: Overview for information on how to authorize a representative.

26. The taxpayer must disclose all known errors and omissions in its tax obligations, including any arm's length and non-arm's length transactions or circumstances relating to the errors and omissions.

27. Supporting documentation (for example, returns, forms, statements, schedules) needed to correct the non-compliance for the most recent six (6) years must be included with the application. However, if the errors or omissions relate to assets or income that are located outside Canada, documentation for the most recent ten (10) years must be included.

28. A tax year within the above timeframes with no errors or omissions does not need to be included with the application. Additional documentation for tax years beyond the above timeframes may be requested by the CRA at its discretion.

29. CRA officials may request additional documents, records, books of account, as well as other additional specific documentation (for example, information relating to foreign accounts and assets, financial institutions and advisers) relevant to the disclosure. In cases where books and records do not exist, taxpayers should make all reasonable efforts to provide estimates.

30. If a taxpayer received assistance or advice from an individual (including a tax professional or promoter) for the subject matter of the disclosure, the name of that individual must be included in the application form.

31. An application may be denied if a taxpayer fails to provide the required information, including, but not limited to, in the following circumstances:

• the application does not include sufficient information to support the disclosure
• a taxpayer does not comply with requests for additional information from the CRA within the timeframes given, or provides insufficient detail to allow the facts of the case to be verified
• the CRA learns of other issues of non-compliance that were not originally included in the disclosure

Payment

32. For an application to be granted relief, payment, or a request for a payment arrangement of the estimated taxes owing must be made, if it applies. The CRA's approval of a payment arrangement is not guaranteed, and all requests will be reviewed by CRA collections officials.

CRA decision

33. Once the CRA receives and acknowledges receipt of a VDP application, an effective date of disclosure (EDD) will be provided. If the application is ultimately deemed eligible for relief, the applicable relief will be granted to the taxpayer up to the EDD.

34. A decision will be made as to whether the taxpayer qualifies for relief under the VDP. To qualify for relief, all of the following conditions must be met:

• the taxpayer is eligible to apply at the time of application (go to Who can apply)
• the taxpayer provides all relevant supporting documentation (go to What to include)
• the taxpayer includes a payment or makes a request for a payment arrangement for the estimated tax owing, if it applies

35. Once the application review is complete, the taxpayer will be notified in writing of the CRA's decision to provide relief or not.

36. Given the complexity and technical nature of certain disclosures, the VDP may request technical assistance from specialty areas within the CRA (for example, the Transfer Pricing Review Committee) where appropriate.

37. The CRA reserves the right to audit or verify any information provided in a VDP application, whether relief is granted under the VDP or not. The VDP conducts limited scope reviews and determines eligibility for penalty and interest relief only. Subject to applicable statute limitation rules, additional assessments of tax may arise for any tax year following a review by another area of the CRA. In addition, if the CRA finds there is fraud or any misrepresentation due to neglect, carelessness, or willful default, an assessment may be issued at any time for any tax year to which the fraud or misrepresentation relates, not just those years included in the VDP application.

Right of redress for taxpayers

Second administrative review

38. If a taxpayer believes that the CRA has not exercised discretion in a fair and reasonable manner, the taxpayer may request in writing that the Assistant Director of the Shawinigan National Verification and Collections Centre review and reconsider the original decision through a second administrative review. The taxpayer may make additional representations for the CRA to consider.

39. The Assistant Director may designate a new officer, not involved in the previous review and decision, to conduct the second administrative review on the Assistant Director's behalf.

Judicial review

40. A taxpayer should request a second administrative review from the CRA before filing an application for a judicial review with the Federal Court.

41. Where a taxpayer believes the CRA has not exercised discretion in a fair and reasonable manner, the taxpayer may file an application to the Federal Court for a judicial review of the CRA's discretionary decision, under section 18.1 of the Federal Courts Act, within 30 days from the date the CRA sent the notification of the decision to the taxpayer. For more information, go to Judicial review.

Objection rights

42. There is no right of objection for a decision made under the VDP as legislation does not give a person the right to dispute a discretionary decision about providing VDP relief. Under subsection 165(1.2), a taxpayer is prohibited from filing an objection to dispute the assessment of penalties and interest made under subsection 220(3.1). However, a taxpayer has the option to request relief of interest and any penalties payable that was not granted under the VDP, but may be in line with the taxpayer relief provisions in other legislation as described in Information Circular IC07-1R1, Taxpayer Relief Provisions.

Where to submit an application

43. The completed VDP application can be submitted either:

• electronically using the Submit documents online service in the My Account, My Business Account, or Represent a Client portal, which can be accessed by going to Sign in to your CRA account
• by mail or fax:
• Voluntary Disclosures Program
  Shawinigan National Verification and Collections Centre
  4695 Shawinigan-Sud Boulevard
  Shawinigan, QC  G9P 5H9
  Fax: 1‑888‑452‑8994

Need more information

44. For more information on the VDP, go to Voluntary Disclosures Program (VDP).

45. All income tax technical publications are available at Income Tax.

46. For questions about the VDP, or to request a Pre-disclosure discussion, you can contact the following CRA general enquiry lines:

• for individuals, call 1‑800‑959‑8281
• for businesses, call 1‑800‑959‑5525
• for all others, go to Contact the Canada Revenue Agency (CRA)