Voluntary Disclosures Program After October 1, 2025: The New Rules

The Voluntary Disclosures Program is the CRA's route for a taxpayer to correct an inaccurate or incomplete filing — or to file something that was never filed — before the CRA finds it. On October 1, 2025 the program was rebuilt. Applications received on or after that date are governed by Information Circular IC00-1R7 for income tax and GST/HST Memorandum 16-5-1 for GST/HST, and are filed on the updated Form RC199. Anything received earlier is assessed under the old rules.

Two changes matter most. First, the former “general” and “limited” programs were replaced by two relief tracks — general and partial — with clearer and more generous relief. Second, the bar to qualify was lowered: a taxpayer who has received a CRA “nudge” or education letter about a potential problem, but is not yet under a CRA audit or investigation, can now apply, where the old rules would often have shut that door.

The stated intent is to reduce the barriers to voluntary compliance. The mechanics still reward moving early, and moving completely — the relief a taxpayer receives now turns on when they come forward rather than on whether they can come forward at all.

Relief runs along two lines — penalties and interest — and the two tracks differ mainly on interest. A general (unprompted) application that the CRA accepts carries 100 percent relief of the applicable penalties and 75 percent relief of the applicable interest, including on the most recent years. A partial (prompted) application carries up to 100 percent penalty relief and 25 percent interest relief.

Both tracks share one further protection: where the CRA grants relief, it will not refer the taxpayer for criminal prosecution on the disclosed matter. For a taxpayer whose exposure includes potential prosecution, that protection is often the point of the exercise.

What the program does not do matters just as much. It does not erase the tax owing — that remains payable in full. It does not cancel all interest, even on the general track. And it does not oblige the CRA to accept an application: acceptance is discretionary, assessed on the facts, and never automatic. A disclosure relieves the consequences of non-compliance; it does not relieve the underlying obligation.

A voluntary disclosure is a risk-management step, not a way to hide income — its whole design points the other way, toward putting the full record in front of the CRA before the CRA asks for it. The recurring situations are unglamorous: several years of unreported business or investment income; offshore accounts or foreign property that should have been reported; GST/HST collected but never remitted, or a business that never registered; a Foreign Income Verification Statement (Form T1135) that was required and never filed.

What these share is a live, quantifiable penalty exposure that grows with time and compounds with interest. Coming forward converts an open-ended risk — discovery on the CRA's timeline, with full penalties and possible prosecution — into a defined, largely penalty-relieved cost on the taxpayer's own timeline.

The order of operations is the work. The exposure has to be measured across every affected year and tax type before anything is filed, because the application must be complete on arrival and cannot be quietly amended later without cost. Where the facts carry criminal exposure, tax counsel is engaged before the CRA is contacted — solicitor-client privilege protects those discussions in a way that communications with an accountant, in Canada, generally do not.