Compliance
Voluntary Disclosures Program Changes: When and How to Use It to Fix Past Filing Mistakes
Canada’s CRA has updated its Voluntary Disclosures Program (VDP) as of October 1, 2025, simplifying applications and introducing ‘general’ and ‘partial’ relief tiers—crucial information if you've realized past mistakes in your returns.
By NomadicTax Research Team • 5-8 min read • March 23, 2026
## What Changed in the VDP (Voluntary Disclosures Program)
As of **October 1, 2025**, the VDP was reformed to be more accessible and flexible.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai)) Key changes include:
- A **simplified application form** (Form RC199) to make the process easier.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
- **Increased eligibility**, so that **prompted disclosures**—for example, where the CRA sends you a notification or educational letter about possible non-compliance—can qualify. Previously, only unprompted disclosures were typically accepted.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
- **Updated relief tiers**:
* **General relief** — for unprompted disclosures, offering **75 % relief on interest** and **100 % relief on penalties**.
* **Partial relief** — more moderate relief for prompted disclosures or applications meeting other criteria.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
## Who Should Use the VDP and When It’s Right for You
If you realize you’ve made a filing mistake—omitted income, overclaimed expenses, or missed reporting something—VDP gives you a path to come clean with more lenient consequences.
Consider it if:
- you’ve received an education letter, or CRA has flagged something in your return.
- you were never audited or are not under investigation yet.
- the mistake was **unintentional or innocent**.
Avoid if:
- you are already under audit or investigation (normally not eligible).([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
- your non-compliance was due to **egregious conduct or fraud**—worst penalties may still apply.
## How It Works: Example & Process
**Example**: Say you forgot to include $10,000 of interest income in a prior year; CRA sent you an education letter. Under the new rules, you may apply for **partial relief**, reducing penalties and possibly some interest.
**Steps**:
1. Fill out **Form RC199** (Voluntary Disclosures Program application). The new form is more user-friendly.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
2. Clearly state years/files you're disclosing. Detail the omission or error, and explain how you found it.
3. Submit before CRA begins audit or enforcement actions related to the issue.
4. If granted general relief: full penalty relief, 75 % off interest. If partial: relief might be less generous, depending on circumstances.
## Important Timings and Limitations
- Changes came into force **October 1, 2025**. Applications received before that date follow older rules.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
- Eligibility is still restricted for those under active audit or prosecution. Eg. misconduct, fraud, or “egregious non-compliance” are disqualifying.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/voluntary-disclosures-program/changes-vdp.html?utm_source=openai))
## Practical Takeaways for Taxpayers & Advisors
- If you receive a letter from CRA about possible errors or missing information, don’t ignore it—may trigger partial relief eligibility.
- Use the simplified RC199 form; get advice to ensure all omissions/errors are covered up front (incomplete applications can be refused).
- Keep good records: what was omitted, how it came to light, dates, correspondence with CRA, etc.
- For small business owners, partnership and contractor income, watch for service payments in trucking industry, etc., which have new reporting requirements. Disclosures may reduce your risk. (See CRA’s newsletter February 2026)([canada.ca](https://www.canada.ca/en/revenue-agency/news/e-services/canada-revenue-electronic-mailing-lists/businesses-tax-information-newsletters/businesses-newsletter-2026-02-20.html?utm_source=openai))
## Conclusion
The updated VDP gives more opportunity for Canadians and businesses to correct past mistakes without the full weight of penalties or harsh interest. But timing, eligibility, and documentation are vital. If this might apply to you—or your clients—addressing errors proactively with VDP can be a wise move rather than waiting for CRA notices or audits.