Compliance
Voluntary Disclosures Program Overhaul: Fixing Past Tax Filings with Confidence
CRA’s revisions to the Voluntary Disclosures Program make correcting unintentional mistakes easier and more lenient—with better relief tiers.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## What Changed in the Voluntary Disclosures Program (VDP)
Effective **October 1, 2025**, the Canada Revenue Agency made several key updates: simplified forms, expanded eligibility, updated relief amounts. ([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))
### Major Adjustments
- **Simplified application form**: RC199 has been improved to be 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))
- **Increased eligibility**: If you were **prompted** by CRA communications (educational notices etc.), you may now apply. Previously only “voluntary, unprompted” disclosures were allowed. ([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* (unprompted applications) → **75 % interest relief**, 100 % penalty relief. ([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))
- *Partial relief* (prompted applications) → **25 % interest relief**, up to **100 % penalty relief**. ([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))
- **Documentation requirements** clarified for how many years of records depending on foreign or domestic income, and GST/HST issues. ([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 Does It Help?
- Individuals or businesses who made **unintentional errors** in tax filings (missed income, ineligible expenses, omissions), but weren’t under audit or found guilty of gross misconduct. ([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))
- Previously, being “prompted” by CRA likely disqualified you—now that barrier is reduced. ([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))
## Examples in Practice
- **Sarah**, a freelance designer, got an educational letter from CRA about unreported small contracts. She can file a **prompted VDP** — get 25 % interest relief, possibly 100 % penalty relief.
- **Raj**, owner of a small landscaping business, missed deductions for certain equipment and wasn’t prompted. His unprompted disclosure means 75 % interest relief and full penalty relief. Both must include supporting documents for relevant years. ([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))
## Action Plan: How to Apply Successfully
1. **Determine if you're eligible**: You're not under current audit/investigation; error was unintentional.
2. **Select unprompted vs prompted**: Did CRA reach out first? If yes, you're prompted.
3. **Gather documents**: For Canadian income: last 6 years; foreign income/assets: up to 10 years; GST/HST: last 4 years. ([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))
4. **Complete Form RC199** with corrected returns, payments if any tax is owing.
5. **Submit before deadlines**: No formal deadline, but earlier is better. CRA changes may evolve.
6. **Keep records of correspondence and receipt** in case CRA needs more info.
## Risks and Limitations
- **Non-compliance or audits** disqualify eligibility.
- If CRA finds intentional fraud, VDP won’t help.
- Relief doesn’t mean full forgiveness of all interest and penalties in all cases.
## Why It’s Meaningful
- Offers a path to fix past mistakes without harsh penalties.
- Helps reduce taxpayer fear of approaching CRA with issues.
- Improves trust in tax system—errors can be corrected with fairness.
**Takeaway:** If you have made a genuine mistake, this revamped VDP can offer full penalty relief and significant interest relief—worst case, partial relief—and is worth exploring sooner rather than later.