If you have unfiled returns, unreported income, or HST that never got remitted, the CRA's Voluntary Disclosures Program (VDP) is the official way to come forward and fix it with less pain. On October 1, 2025, the CRA changed the program, and the new version is more generous than the old one.
The short version
- Unprompted applications, where you come forward before the CRA contacts you about the issue, can get 75% relief of interest and 100% relief of penalties (CRA).
- Prompted applications, where the CRA has already reached out but hasn't started enforcement action, can still get 25% interest relief and up to 100% penalty relief.
- There's a simpler application form, RC199.
- Applications received before October 1, 2025 are reviewed under the old rules.
What the VDP is for
The VDP lets individuals and businesses correct past mistakes or omissions, such as:
- income that wasn't reported, including foreign income
- returns that were never filed
- GST/HST that was collected but not remitted, or input tax credits claimed in error
In exchange for coming forward and paying what you owe, the CRA can reduce penalties and interest, and you aren't prosecuted for the matters you disclosed.
What changed on October 1, 2025
Under the old program, a disclosure the CRA considered prompted by its own contact often wasn't accepted at all, and interest relief was more limited.
The new policy creates two clear tiers:
- General relief normally applies to unprompted applications: 75% of applicable interest and 100% of applicable penalties are relieved.
- Partial relief normally applies to prompted applications: 25% of applicable interest and up to 100% of applicable penalties are relieved.
The CRA also updated its guidance, Information Circular IC00-1R7 for income tax and GST/HST Memorandum 16-5-1, and simplified Form RC199.
Prompted or unprompted?
Roughly, an application is prompted when the CRA has already communicated with you about the issue, for example in a letter, but hasn't started an audit or other enforcement action on it. Once enforcement action on the matter has started, the VDP generally isn't available for it. Timing is everything, which is why coming forward before the CRA contacts you is worth so much more.
How far back relief goes
By law, the CRA can only cancel penalties and interest for the past 10 calendar years. You may still need to correct older years, but relief may not apply to them.
What a strong application looks like
- Complete: disclose everything relevant, not just part of it.
- Supported: include the documents and calculations the CRA asks for.
- Paid, or with a plan: include payment of the estimated amount owing, or be ready to discuss a payment arrangement.
- On the right form: use Form RC199 and follow the current guidance.
Should you use it?
If the issue involves real money and the CRA hasn't contacted you yet, the unprompted tier can save a lot of interest. If you've already received a CRA letter, the prompted tier can still help. Either way, get the numbers right before you submit, because the CRA expects complete and accurate disclosure.
Sources
- Changes to the Voluntary Disclosures Program, Canada Revenue Agency
- Cancel or waive penalties and interest (taxpayer relief), Canada Revenue Agency
Behind on filings or HST? Our CRA audit support and catch-up bookkeeping services can get you organized and help you decide whether a voluntary disclosure makes sense.