CRA’s New Voluntary Disclosures Program: Easier access, Greater Relief.
Effective October 1, 2025, the Canada Revenue Agency (CRA) has introduced major revisions to the Voluntary Disclosures Program (VDP). These changes are intended to make it easier for taxpayers to come forward, correct past errors, and obtain relief from penalties and interest.
Key Changes
- Broader Eligibility – Prompted applications now permitted with up to 100% penalty relief and 25% interest relief. Previously, these were ineligible.
- More Interest Relief – Unprompted applications may receive 75% interest relief, including the last 3 years (previously capped at 50%, excluding last 3 years).
- Second Applications – Now allowed if either the matter is different or circumstances were beyond taxpayer’s control (previously required both).
- Simplified Documentation – 10 years (foreign income/assets), 6 years (domestic income/assets), 4 years (GST/HST). Previously, no clear limits.
- Expanded Coverage – Now includes fuel charge, luxury tax, underused housing tax, digital services tax, and global minimum tax.
- Simplified Application Form – A redesigned RC199 will be introduced October 1, 2025.
Comparison: Old vs. New Rules
| Category | Old Rules (Pre-Oct 2025) | New Rules (Post-Oct 2025) |
| Eligibility | Prompted applications generally ineligible | Prompted applications eligible (penalty up to 100%, interest up to 25%) |
| Interest Relief (Unprompted) | Max 50%, no relief for last 3 years | Up to 75%, including last 3 years |
| Penalty Relief | 100% relief (unprompted only) | 100% relief (unprompted), up to 100% relief (prompted) |
| Second Applications | Allowed only if different matter AND beyond control | Allowed if different matter OR beyond control |
| Documentation | No defined limits | 10 years (foreign), 6 years (domestic), 4 years (GST/HST) |
| Taxes Covered | Income Tax, GST/HST, Excise Acts, etc. | All previous + Fuel Charge, Luxury Tax, UHT, DST, GMT |
| Application Form | RC199 (long, complex) | Simplified RC199 (Oct 1, 2025) |
Takeaway: The revised VDP offers greater flexibility and more generous relief, particularly for taxpayers who come forward voluntarily. However, CRA’s decisions remain discretionary and cannot be appealed through the normal objection process. Professional advice is recommended to maximize benefits under the new program.
This article is intended for general information purposes only and does not constitute professional advice. Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.