The CRA Voluntary Disclosures Program (VDP) offers Canadian taxpayers a second chance to correct past tax mistakes without facing harsh penalties or prosecution. If you have unreported income, incorrect filings, or missed tax obligations, the CRA VDP program can help you come forward voluntarily and get back into compliance.
This CRA VDP guide explains how the program works, who qualifies, how to apply, and whether the CRA VDP is still valid today.
What Is the CRA Voluntary Disclosures Program (VDP)?
The CRA Voluntary Disclosure Program (VDP) allows individuals, self-employed professionals, and businesses to voluntarily disclose previously unreported or incorrect tax information. When accepted, the CRA may grant:
- Relief from penalties
- Partial relief from interest
- Protection from criminal prosecution
The goal of the CRA VDP is to encourage voluntary compliance rather than punishment.
Who Can Use the CRA VDP Program?
The CRA VDP program is available to:
- Individuals with unreported income
- Small business owners
- Corporations
- Self-employed professionals
- Taxpayers who failed to file past tax returns
- Those who claimed incorrect deductions or credits
If you realize that your tax filings are inaccurate and the CRA has not yet contacted you, you may qualify.
CRA VDP Eligibility Requirements
To be accepted, your disclosure must meet all CRA VDP eligibility criteria:
- Voluntary
The CRA must not already be aware of the issue. - Complete
All relevant details and documents must be disclosed. - Penalty Exposure
The error must involve potential penalties or interest. - At Least One Year Past Due
The disclosure must relate to a prior tax year.
If any of these conditions are not met, the CRA may reject the VDP application.
Is CRA VDP Still Valid Today?
Yes — CRA VDP is still valid today.
However, the CRA modernized the program and now reviews applications more strictly. There are two tracks:
- General Program – Offers partial penalty and interest relief
- Limited Program – Provides penalty relief only (interest still applies)
The level of relief depends on the nature and severity of the non-compliance.
CRA File Past Tax Years VDP: What Can Be Disclosed?
You can use the CRA VDP to file past tax years, including:
- Unreported employment or business income
- Foreign income and assets
- Missed GST/HST filings
- Payroll remittance errors
- Incorrect expense claims
- Late or missing corporate tax returns
Many small businesses discover issues during cleanup or growth stages. This is often where professional support, such as small business bookkeeping services in Mississauga, becomes essential to identify errors before submitting a VDP.
CRA VDP Procedure: Step-by-Step
Here is a simplified CRA VDP procedure:
Step 1: Review Your Tax Situation
Identify all errors, missing filings, or unreported income.
Step 2: Gather Supporting Documents
This includes bank statements, invoices, contracts, payroll records, and prior tax returns.
Step 3: Complete the CRA VDP Form
You must accurately disclose all relevant information.
Step 4: Submit the CRA VDP Application
Applications can be submitted online or by mail.
Step 5: CRA Review & Decision
The CRA will assess your application and inform you of acceptance or rejection.
CRA VDP Form: What You Need to Know
The CRA VDP form (Form RC199) requires:
- Taxpayer identification details
- Tax years involved
- Type of disclosure (income tax, GST/HST, payroll, etc.)
- Explanation of the error
- Supporting documentation
Accuracy is critical. Incomplete or misleading information may result in rejection.
Details on How to Fill Out a CRA VDP
When filling out a CRA VDP application, keep these tips in mind:
- Be fully transparent
- Disclose all years affected
- Provide clear explanations
- Attach complete documentation
- Avoid estimates unless unavoidable (explain why)
Many rejections happen due to incomplete disclosures or missing years.
How Do I Notify CRA Re VDP Participation?
You notify the CRA by submitting your CRA VDP application through:
- CRA’s online portal (My Account / My Business Account), or
- Mailing the completed VDP form to the CRA Voluntary Disclosures Program office
Once submitted, the CRA will acknowledge receipt and may request additional information.
Benefits of Using the CRA Voluntary Disclosure Program
Using the CRA VDP can help you:
- Avoid gross negligence penalties
- Reduce accumulated interest
- Prevent criminal prosecution
- Restore compliance and peace of mind
- Clean up years of tax exposure
For businesses planning growth, loans, or audits, resolving past issues is essential.
Common Reasons CRA VDP Applications Are Rejected
- CRA already initiated contact
- Incomplete disclosure
- Missing tax years
- Intentional misrepresentation
- Failure to submit required documents
Professional review before submission significantly improves acceptance chances.
Final Thoughts: Is CRA VDP Worth It?
If you have undisclosed tax issues, the CRA Voluntary Disclosure Program (VDP) is often the safest and most cost-effective solution. While it no longer guarantees full interest relief, it still provides meaningful protection and compliance benefits.