If you've made errors on past returns — unreported income, undisclosed foreign accounts, missed GST remittances — the CRA's Voluntary Disclosure Program (VDP) offers compliance with reduced or no penalties.
What Is the VDP?
The VDP allows taxpayers to come forward voluntarily to correct past returns or file late returns, in exchange for penalty relief and partial interest relief — provided you apply before CRA contacts you.
General vs. Limited Program
General: Full penalty waiver; 50% interest relief for the 3 years before application. For minor, unintentional errors.
Limited: No penalty waiver; limited interest relief. For large-dollar, deliberate non-compliance.
Common VDP Situations
- Unreported foreign income or offshore accounts
- Undeclared T1135 (Foreign Income Verification)
- Unreported cryptocurrency gains from prior years
- Cash income never reported
- GST/QST not collected or remitted
The Process
- Contact an authorized representative (anonymity is possible initially)
- Prepare all amended returns with documentation
- Submit VDP application with amended returns
- CRA confirms eligibility and relief granted
- Pay outstanding taxes and remaining interest