The VDP lets taxpayers voluntarily correct past tax errors for potential penalty and interest relief, but only for tax years overdue by at least one year.
The Canada Revenue Agency (CRA) announced, on 10 September 2025, that it will update the Voluntary Disclosures Program (VDP) to simplify the process for taxpayers to amend unintentional errors or omissions in their tax filings, starting 1 October 2025.
The program remains focused on providing relief that is fair and does not reward non-compliance. Taxpayers who use the program will not receive relief that puts them in a better financial position than those who comply with tax rules from the start.
The VDP lets taxpayers voluntarily correct past tax errors for potential penalty and interest relief, but only for tax years overdue by at least one year.
What is the Voluntary Disclosures Program?
The Voluntary Disclosures Program (VDP) is an opportunity for taxpayers to inform the Canada Revenue Agency (CRA) about and correct errors or omissions in their tax obligations. If relief is provided by the CRA under the VDP, a taxpayer may receive some penalty and interest relief, and will not be referred for criminal prosecution. Any taxes owing will still have to be paid by the taxpayer in full.
The VDP aims to provide relief that is fair and is not intended to reward non-compliance. In other words, a taxpayer that follows the rules should not be worse off economically than a taxpayer who uses the VDP. The VDP is not intended to serve as a vehicle for taxpayers to intentionally avoid their legal obligations under legislation administered by the CRA.
Key changes to the program
The VDP is now easier to understand and apply to. Some of the changes include:
- Increased eligibility
- Updated relief
- Simplified language and process
- Documents to include
Increased eligibility
Taxpayers who receive communications from the CRA (like an educational letter) about a potential non-compliance issue (for example, not reporting income or claiming ineligible expenses) could now be eligible for the program. The CRA will continue to restrict VDP eligibility for taxpayers who are under audit or investigation, and for taxpayers who were egregiously or intentionally non-compliant.
Updated relief
Voluntary applications will be eligible for two different types of relief:
- Unprompted applications (general relief)
- Applications submitted with no prior compliance communication from the CRA
- Eligible for 75% interest relief and 100% penalty relief
- Prompted applications (partial relief)
- Applications submitted after receiving compliance communication from the CRA
- Eligible for 25% interest relief and up to 100% penalty relief
Simplified language and process
The new policy is written in plain language that makes it easier for taxpayers to understand. Due to the transition from paper to electronic, the application process and form will be simplified. Now, it will be easier than ever to submit an application.
Documents to include
Applications involving non-compliance over multiple years should include the following number of impacted years:
- Under the Information Circular IC00-1R7, Voluntary Disclosures Program:
- The most recent 10 years of foreign-sourced income or assets
- The most recent 6 years of Canadian-sourced income or assets
- Under the GST/HST Memorandum 16-5-1, Voluntary Disclosures Program (Applications Received On or After October 1, 2025):
- The most recent 4 years of GST/HST-related information
Applying to the VDP
When applying to the VDP, applications must:
- Be voluntary.
- Be complete.
- Include an error or omission with applicable interest charges, penalties, or both.
- Include the payment or request for a payment arrangement for the estimated tax owing amount, if applicable.
- Include information that is at least one year past the due date for filing.
