The Voluntary Disclosures Program (VDP) lets you correct a tax mistake with the CRA before it finds the mistake itself, and in return the CRA can cancel penalties and part of the interest. If you come forward on your own, the relief is 100% of the penalties and 75% of the interest. The rules changed for applications received on or after October 1, 2025, so older articles may be out of date.
What the program does
You may have left income off a return, missed a return, or claimed something you weren’t entitled to. Normally the CRA would assess the tax, add interest and charge penalties, and in serious cases it could consider prosecution. The VDP is a way to fix that on your own terms. You disclose the error, pay what you owe, and the CRA looks at reducing what would otherwise be added on top.
The program covers income tax and also GST/HST, among other taxes. It doesn’t wipe out the tax itself. You still owe every dollar of tax that should have been paid.
The conditions you have to meet
The CRA’s current information circular (IC00-1R7) lists what a valid application needs. Each item matters, because a miss on any one can end the application.
- Voluntary: you are not under audit or investigation for the same matter.
- Complete: you give all relevant information for all the tax years involved.
- Substance: there is an error or omission that has interest, a penalty, or both attached.
- Timing: the information relates to a tax year at least one year past its filing due date.
- Payment: you pay the estimated tax owing, or ask for a payment arrangement where that applies.
The one-year rule looks at the tax year, and covers more than returns you never filed. A 2022 return that was filed with income missing can qualify, for example, once the year is more than a year past its due date.
Unprompted or prompted, and what each gets you
Since October 1, 2025 the CRA sorts applications into two kinds, and the relief differs.
Unprompted means you apply when nobody at the CRA has talked to you about an identified compliance issue. Getting a general educational letter doesn’t count against you. You receive 75% relief of the interest and 100% relief of the penalties.
Prompted applications are those made after the CRA has contacted you, by phone or in writing, about a specific issue, or after it has received third-party information suggesting you didn’t comply. The relief is 25% of the interest and up to 100% of the penalties. Before the change, a CRA contact often meant the door was closed. Now it can still work, with less relief.
Take a made-up example to show the arithmetic. Say you forgot to report $10,000 of self-employed income for a tax year that is now well over a year old. Suppose the extra tax works out to $2,500, the penalty would be $250 and the interest so far is $400. Applying on your own, you pay the $2,500. The $250 penalty is cancelled and $300 of the interest (75%) is cancelled, so you owe $100 of interest. Applying after a CRA letter about the same income, you’d pay the tax, up to $250 less in penalty and only $100 off the interest, leaving $300.
Those numbers are only an illustration. Real penalties depend on the type of error, and you can read how the standard late-filing penalty works in our CRA late-filing penalty relief guide.
Situations where it doesn’t apply
The CRA says it can’t accept an application that relates to certain things. These include returns that would result in a refund or have no tax or penalties owing, and penalties or interest that have already been assessed. There you’d need a different route. It also excludes making or changing elections and cases involving insolvency events. Anyone under audit or investigation on the matter is out, and so are cases of egregious non-compliance.
How to apply
Every application starts with Form RC199, Voluntary Disclosures Program Application. You can send it electronically through My Account, My Business Account or Represent a Client. You can also send it by mail or fax to the Shawinigan National Verification and Collections Centre. The CRA lists the current address and fax number on the form page.
You attach the missing or corrected returns and supporting documents. The CRA asks for the most recent 6 years of records in general, 10 years where foreign assets or foreign income are involved, and 4 years for GST/HST. Tax years with no error can be left out. If the books and records don’t exist, you give reasonable estimates and explain how you got them.
When the application arrives, the CRA gives it an effective date of disclosure. That date matters because it fixes the point at which your disclosure counts as made. If you need help getting into your online account first, see the CRA My Account guide.
What happens after you send it
After it arrives, the CRA reviews the application against the conditions above and may ask for more documents, records or books of account. The circular gives no fixed processing time, so there’s no date to count on. You get the decision in writing. The CRA also keeps the right to audit or check any information you gave.
If relief is granted, you get protection from prosecution for what you disclosed, and gross negligence penalties don’t apply. But the tax must be paid, or a payment arrangement requested. The CRA doesn’t promise to accept an arrangement, and a failure to pay can lead it to deny the application.
There is no right of objection to a VDP decision. What you can do is ask in writing for a second administrative review, or apply to the Federal Court for judicial review within 30 days.
How it differs from taxpayer relief
Taxpayer relief is a separate provision. You ask the CRA to cancel or waive penalties and interest because of extraordinary circumstances, such as illness, a disaster or CRA error, using Form RC4288 or My Account. It covers periods within 10 calendar years and it is decided case by case. You’d typically use it when you already owe amounts that have been assessed.
The VDP is different in three ways. You use it to correct something the CRA doesn’t yet know about, or hasn’t finished raising. No extraordinary circumstances are needed. And it comes with set relief levels instead of a judgment on your excuse. The trade is that the tax year must be at least a year old and the disclosure must be complete. If your situation is a late filing with a good reason, start with the late-filing relief guide. If it’s an unreported amount, the VDP is the more likely fit.
Examples of when it fits
Someone who sold a rental property years ago and never reported the gain fits. So does a self-employed worker who left cash income off returns for several years, or anyone who earned income abroad and didn’t declare it. Collecting HST and not remitting it may also qualify under the GST/HST side of the program.
It doesn’t fit if you filed on time and just want a penalty removed for a hard year. It also doesn’t fit if the CRA has already assessed the penalty, since assessed amounts fall outside the VDP. And a return that produces a refund needs no disclosure.
Before you apply, work out roughly what you owe. The income tax calculator gives a rough figure for one year, though back years used different rates. If unfiled returns are part of the problem, the notices and unfiled returns guide explains the ground rules. For large or complicated amounts, a tax professional can prepare the application.
Sources
- IC00-1R7, Voluntary Disclosures Program (canada.ca)
- Changes to the Voluntary Disclosures Program (canada.ca)
- Form RC199, VDP Application (canada.ca)
Common questions
Does the VDP cancel the tax I owe?
What relief do I get if the CRA has already contacted me?
Which form do I use for a voluntary disclosure?
Can I object if the CRA refuses my application?
Last reviewed: . Figures come from the official sources listed above. How we check the numbers and our editorial policy.