New Rules for the CRA’s Voluntary Disclosures Program: What You Need to Know

New Rules for the CRA’s Voluntary Disclosures Program: What You Need to Know

Effective October 1, 2025, the Canada Revenue Agency (CRA) has introduced major updates to its Voluntary Disclosures Program (VDP)—a move aimed at encouraging more Canadians to come forward and correct past tax errors with greater clarity and fairness.

As an accounting firm committed to helping individuals and businesses stay compliant and financially confident, we’re breaking down what’s changed, what it means for you, and how we can help.

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What Is the Voluntary Disclosures Program?

The VDP allows taxpayers to proactively correct inaccurate or incomplete tax filings before the CRA discovers them. In return, the CRA may offer relief from penalties and partial interest charges.

Whether it’s unreported income, missed GST/HST filings, or foreign asset disclosures, the VDP is a powerful tool for getting back on track—without the full weight of enforcement.

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What’s Changed as of October 1, 2025?

The CRA’s overhaul of the VDP introduces several taxpayer-friendly improvements:

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1. Simplified Application Process

• The updated Form RC199 is now easier to complete and submit.

• Clearer instructions and streamlined documentation requirements reduce barriers to entry.

2. Expanded Eligibility

• Taxpayers who received education letters or general CRA guidance are now eligible.

• Those under active audit or criminal investigation remain excluded.

3. Two-Tier Relief System

CRA now distinguishes between prompted and unprompted disclosures:

Unprompted disclosure provides interest relief up to 75% and 100% relief of penalty

Prompted disclosure provides interest relief up to 25% and  up to 100% relief of penalty

• Unprompted: No prior CRA contact about the issue.

• Prompted: CRA flagged the issue, but taxpayer initiates disclosure before formal enforcement.

4. Tailored Documentation Requirements

Depending on the nature of the disclosure:

• Foreign-sourced income/assets: Last 10 years

• Canadian-sourced income: Last 6 years

• GST/HST errors: Last 4 years

Only years with actual errors or omissions need to be included.

 

​Why This Matters

These changes reflect a more nuanced and compassionate approach to compliance. Whether you’re a small business owner who missed a GST filing or an individual with unreported foreign income, the new VDP offers a clearer path to resolution—with meaningful relief.

 

How We Can Help

Navigating the VDP can be complex—but you don’t have to do it alone. Our team of experienced professionals can:

• Assess your eligibility

• Prepare and submit your disclosure

• Negotiate relief terms with the CRA

• Ensure full compliance moving forward

If you think you may benefit from the Voluntary Disclosures Program, now is the time to act. The earlier you come forward, the greater the relief—and the peace of mind.

 

Contact us today to schedule a confidential consultation.

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