What is the CRA Voluntary Disclosures Program?

The Voluntary Disclosures Program (VDP) lets Canadians come forward to correct previously unfiled or inaccurate tax information before CRA contacts them. In exchange for voluntary disclosure, CRA may grant relief from civil penalties and, in some cases, partial interest relief. Criminal prosecution is generally not pursued when a taxpayer uses the VDP proactively.

Who qualifies for the VDP?

To qualify, your disclosure must be: (1) voluntary — CRA has not already contacted you about this issue, (2) complete — you disclose everything, not just part of the problem, (3) involve a potential penalty or prosecution risk, and (4) relate to information at least one year old. If CRA has already started an audit, sent a demand to file, or contacted you about the specific issue, you do not qualify for the VDP for that issue.

What relief does the VDP actually provide?

Under the General Program, CRA will cancel civil penalties entirely and may grant up to 50% interest relief for the oldest years. Under the Limited Program (for large dollar amounts or sophisticated taxpayers), penalties are still cancelled but there is no interest relief. You still owe all the underlying tax plus remaining interest — the VDP does not forgive the tax itself, only the pile-on penalties.

Can I make an anonymous pre-disclosure consultation?

Yes. The VDP allows a "no-name" disclosure where you or your tax advisor call CRA to discuss the situation without identifying the taxpayer first. This let you understand whether your situation qualifies and what relief might be available before committing. Once you are satisfied, you formally identify yourself and submit the full disclosure. There is no penalty for the pre-disclosure consultation itself.

What types of issues can the VDP fix?

Common VDP applications cover: unfiled tax returns (for multiple years), unreported employment income, tips/cash income never declared, foreign investment income, foreign account reporting (T1135), unreported capital gains, and cryptocurrency holdings never disclosed. It also covers GST/HST and payroll account obligations for businesses.

CRA Voluntary Disclosures Program: How to Come Clean on Unfiled Taxes

Not everyone who files late or misses income does so intentionally. Life gets complicated — careers change, foreign accounts get opened and forgotten, and some people simply fall behind on multiple years of returns. If you have tax issues you have not disclosed to CRA, the Voluntary Disclosures Program (VDP) exists for exactly this situation.

What the VDP is (and is not)

The VDP is part of CRA’s Taxpayer Relief framework. It is designed to encourage compliance by offering a deal: come forward before we find you, and we will reduce the consequences.

What the VDP does:

Cancels civil penalties on qualifying disclosures
May reduce accrued interest (General Program only)
Reduces or eliminates risk of criminal prosecution for tax evasion

What the VDP does not do:

Forgive the underlying tax you actually owe
Eliminate all interest on unpaid tax
Protect you once CRA has already initiated contact about the specific issue

The two VDP tracks

CRA split the VDP into two tracks in 2018:

General Program

For most taxpayers — those who did not deliberately evade taxes on a large scale.

Relief available:

Civil penalties: cancelled in full
Interest: partial relief possible, typically 50% on interest for years more than 3 years old

Who qualifies: Individuals and businesses with income omissions, unfiled returns, or foreign reporting failures that were not obviously deliberate large-scale evasion.

Limited Program

For situations involving “major non-compliance” — large dollar amounts, sophisticated structures, repeated use of offshore accounts, or situations where CRA considers the non-compliance deliberate.

Relief available:

Civil penalties: cancelled
Interest: no relief — you owe all interest in full

Who gets placed here: CRA decides which track applies after reviewing the disclosure. You cannot self-select the Limited Program.

The four eligibility conditions

Your VDP application must meet all four conditions:

1. Voluntary

CRA has not yet contacted you about the specific issue. This includes:

A letter asking you to file a specific return
A compliance review notice
A formal audit initiated on related issues
A demand to file

If CRA has already reached out about the exact issue you want to disclose, you do not qualify for the VDP for that issue. (You may still qualify for Taxpayer Relief on penalties if you have other grounds.)

2. Complete

You must disclose everything related to the issue — not just some of the unreported income or some of the unfiled years. Partial disclosure disqualifies the application. CRA expects you to come fully clean.

3. One year old or more

The information you are disclosing must relate to something that is at least one year past its due date. You cannot use the VDP to get a quick deadline extension.

4. Involves potential for a penalty or prosecution

There must be an actual risk — the disclosure must fix something that would have attracted a penalty or prosecution had CRA found it themselves.

Common VDP scenarios

Situation	VDP route
3 years of unfiled personal tax returns	Yes — General Program typically
Unreported tips/cash income over several years	Yes — General Program
Foreign bank account never reported (T1135)	Yes — may be Limited Program if large
Cryptocurrency gains never declared	Yes — General Program or Limited depending on scale
Unreported rental income	Yes — General Program
GST/HST not collected on self-employment	Yes — General Program
Missed RRSP overcontribution reporting	Possible — depends on amount

How to apply (step by step)

Step 1: Consider an anonymous pre-disclosure consultation

You (or your accountant or tax lawyer) can call CRA’s VDP at 1-866-837-7888 and describe the situation without giving your name or SIN. CRA will advise whether the situation appears to qualify, what track it would fall under, and what relief might be available.

This call has no legal consequences — it is exploratory only.

Step 2: Prepare the full disclosure package

You will need:

Completed Form RC199 (Voluntary Disclosures Program — Taxpayer Agreement) — available on canada.ca
Completed tax returns for all unfiled years (T1 Returns, prepared correctly)
All relevant supporting documents (T-slips, bank statements, foreign account statements)
A written explanation of why the returns were not filed or income not reported

Step 3: Submit to the VDP

Mail or fax the package to the National Voluntary Disclosures Program Centre:

Mail: National VDP, Shawinigan-Sud Tax Centre, PO Box 3000, STN Main, Shawinigan QC G9N 7S6

Or submit through Represent a Client (if using a tax professional) or the VDP submission portal on My Account.

Step 4: Await acceptance and pay

CRA will review the application and notify you of the accepted relief. You are then expected to pay the remaining taxes and reduced interest by the date specified. The arrangement is not final until you pay.

What happens if CRA contacts you first

If CRA reaches out before you submit a VDP application, the VDP is no longer available for that specific issue. However:

You may still negotiate a payment arrangement with Collections
You may still apply for Taxpayer Relief for penalties and interest using Form RC4288 if you have legitimate hardship grounds
If you have other unreported issues beyond what CRA found, you can still file a VDP for those separate issues

Working with a tax professional

For complex situations — multiple unfiled years, significant foreign assets, or large dollar amounts — working with a tax lawyer (not just an accountant) is worth the cost. Lawyers have solicitor-client privilege, meaning communications about your situation cannot be compelled by CRA. An accountant does not have the same protection.

For simpler cases (a few missed years of T4 income, straightforward unreported freelance income), a CPA can typically handle the VDP application.

How to Set Up a CRA Payment Plan — Once the VDP is accepted, paying the balance
How to Respond to a CRA Audit — If CRA found you before you came forward
How to Appeal a CRA Decision — If the VDP relief offered is less than you expected
Can I Deduct Investment Fees? — Getting future returns right