What’s Changed as of October 1, 2025
The Canada Revenue Agency (CRA) updated the Voluntary Disclosures Program (VDP) to make it more accessible and fair. Key changes include a simplified application form, expanded eligibility, and new relief tiers, drawing clear lines between unprompted and prompted disclosures. (canada.ca)
Eligibility: Who Can Participate?
- Individuals, corporations, trusts, partnerships, and GST/HST registrants etc. are eligible now, provided certain conditions are met. (canada.ca)
- Excluded: those currently under audit or investigation, or with egregious or intentional non-compliance. (canada.ca)
Relief Tiers: Unprompted vs Prompted Disclosures
| Type of Application | Interest Relief | Penalty Relief |
|---|---|---|
| Unprompted (no prior communication from CRA) | 75% interest relief | 100% penalty relief (canada.ca) |
| Prompted (CRA raised an issue) | 25% interest relief | Up to 100% penalty relief (canada.ca) |
Timeframes & Documentation Requirements
- Canadian-sourced income or assets: most recent 6 years. (canada.ca)
- Foreign-sourced income/assets: most recent 10 years. (canada.ca)
- GST/HST-related periods: most recent 4 years under the updated memorandum. (canada.ca)
Practical Steps to Apply Properly
- Decide which tier applies: Were you prompted by CRA or not?
- Gather all necessary documents for the required years (6 or 10 years).
- Fill out Form RC199, making sure to include full details about the errors or omissions. (canada.ca)
- Include estimated tax owing or request a payment arrangement. (canada.ca)
- Submit via CRA’s “Submit documents online” portal. Mail or fax in exceptional cases. (canada.ca)
Example Scenario
Suppose Maria, a self-employed consultant, discovers she didn't report some consulting income for two years (Canadian-sourced). She received an educational letter from the CRA, alerting her to possible issues.
- Because she was prompted, she applies under the prompted relief tier, so she’d be eligible for 25% interest relief and up to 100% penalty relief, assuming she meets documentation requirements.
- She includes 6 years of Canadian-sourced income details (even though only two years have omissions) and any foreign income over the past 10 years (if applicable).
- She submits Form RC199, includes the owed taxes, pays or requests payment arrangement, and labels her application properly.
Actionable Advice
- Don't wait until an audit — unprompted applications provide much better relief.
- Keep excellent financial records, especially for foreign income or assets.
- Involve a tax professional when evaluating eligibility or gathering documentation — mistakes can delay relief.
- Monitor CRA communications: education letters may trigger eligibility.