Voluntary Disclosure Program (VDP): What’s New as of October 1, 2025?
The Voluntary Disclosures Program (VDP) from the Canada Revenue Agency (CRA) offers taxpayers a chance to correct past tax mistakes before CRA identifies them. If accepted, the disclosure can lead to relief from penalties and interest—and protection from criminal prosecution. However, any taxes owed must still be paid in full.
As of October 1, 2025, the VDP has undergone major changes. Here’s what you need to know.
New Categories of Applications
CRA now classifies VDP applications as either unprompted or prompted.
Unprompted Applications
These are made before CRA contacts you about a specific issue. For example:
You haven’t received any CRA letters or calls about the error.
You’ve only received general guidance or educational notices.
Relief available:
75% of applicable interest
100% of applicable penalties
Prompted Applications
These are made after CRA has contacted you about a specific issue. This includes:
Letters or notices identifying a specific error or omission
Deadlines to correct an issue
CRA receiving third-party information about your non-compliance
Relief available:
25% of applicable interest
Up to 100% of applicable penalties
What All Applications Have in Common
Whether prompted or unprompted, all accepted applications receive:
No gross negligence penalties
No criminal prosecution
Eligibility Requirements
To qualify for relief under the updated VDP, your application must meet all of the following conditions:
1. Voluntary Submission
Your disclosure must be made before any audit or investigation begins—by CRA or any other authority (e.g., law enforcement, securities commissions).
2. Past Due Information
Income tax: The tax year must be at least one year past the filing deadline.
GST/HST and other taxes: The reporting period must be at least one period past the deadline.
3. Interest or Penalties Must Apply
Your disclosure must involve an error or omission that results in interest, penalties, or both.
4. Complete and Accurate Documentation
You must include:
All known errors and omissions
Related transactions (arm’s length and non-arm’s length)
Supporting documents for:
6 years (standard cases)
10 years (foreign assets or income)
4 years (GST/HST memorandum matters)
CRA may request additional documentation beyond these timeframes.
5. Payment or Arrangement Request
You must either:
Pay the estimated tax owing, or
Request a payment arrangement (subject to CRA approval)
Can You Submit Again?
CRA expects taxpayers to stay compliant after receiving VDP relief. However, a second application may be considered if:
Circumstances were beyond your control
The new disclosure relates to a different issue
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a newsletter such as this, a further review should be done by a qualified professional.
No individual or organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of liability for its contents.