The VDP lets taxpayers correct past tax errors or omissions before the CRA contacts them, potentially reducing penalties and part of the interest owed.
If you have unfiled returns, unreported income or GST/HST errors, the Voluntary Disclosures Program is a way to come forward and fix them with relief from penalties and part of the interest. To qualify a disclosure must be voluntary (before any CRA contact on the issue), complete, involve a potential penalty, and generally be at least one year overdue.
The programme has become less generous than it once was, with a distinction between general and limited relief, and applications are assessed on their facts. The critical point is timing: once the CRA opens an enquiry, the door closes, so acting before a letter arrives is what preserves the option.
A business realises it failed to report several years of income. It applies to the VDP before any CRA contact, files the corrected returns, and pays the tax, avoiding the gross-negligence penalties that would otherwise apply.
Our certified accounting firm handles this for businesses and individuals across Canada, at fixed fees with no surprises.
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