What Are the Conditions for a Valid CRA Voluntary Disclosure in Canada?

Before you put time into a voluntary disclosure, you will want to know whether your situation can qualify at all. The CRA sets out specific conditions, and an application that misses one can be denied.

This article walks through each condition for the Voluntary Disclosures Program (VDP) in plain language, along with the main exceptions. It is general information, so confirm how it applies to you with a lawyer or accountant.

This article covers Canadian federal tax law, which applies in every province.

The five conditions

Under IC00-1R7, which applies to applications received on or after October 1, 2025, the application must meet these conditions.

• It must be voluntary.
• It must be complete, with all supporting documents.
• It must involve interest, penalties or both.
• It must include information that is at least one year past the filing due date.
• It must include payment of the estimated tax owing, or a request for a payment arrangement.

Voluntary: before an audit starts

A disclosure is not voluntary if an audit or investigation has been initiated against you or a related taxpayer for the disclosed information. This includes investigations by law enforcement, securities commissions or other federal or provincial regulators, not just the CRA.

A CRA letter or notice about a specific issue does not by itself end eligibility. The CRA treats the application as prompted if you are not under audit or investigation. For GST/HST, the same audit rule applies to the person or a related person.

Whether an application is unprompted or prompted affects the relief. It is generally unprompted if the CRA has not communicated with you about the compliance issue, or if the only contact was a general education letter. It is generally prompted if it follows CRA communication identifying a specific error or setting a correction deadline, or follows third-party information about your non-compliance. Unprompted applications normally receive 100% relief of the applicable penalties and 75% relief of the applicable interest. Prompted applications normally receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties.

Complete: documents and years

The application package is the signed Form RC199, all returns, forms and schedules needed to correct the non-compliance, and payment or a payment arrangement request. The VDP says it will consider fully completed applications only.

Years with no errors or omissions need not be included. Where books and records do not exist, you should make reasonable estimates, and the CRA may request more records. Look-back figures differ across CRA pages, so confirm the current figure before filing.

Relief covers penalties and interest, not the tax itself, so tax owing must be paid. If you cannot pay in full, you may ask for a payment arrangement on the application, but the CRA's approval is not guaranteed.

Situations that generally do not qualify

• Applications that produce a refund or no tax or penalties owing.
• Requests for relief on penalties or interest already assessed.
• Applications to make or alter an election.
• Insolvency for the years involved.
• Matters tied to an advance pricing arrangement or a treaty competent authority agreement.

Someone who already received VDP relief must stay compliant. A later application may be considered if the circumstances were beyond their control or concern a different matter.

After you apply

After receiving an application, the CRA sends an acknowledgement letter with the effective date of disclosure. Relief runs up to that date if you qualify. The CRA does not publish a processing time for VDP applications, so it is best not to count on a particular timeline.

• The CRA may deny an application as incomplete if requested information or documents are not provided within a reasonable timeframe.
• The decision letter states the application type, the relief level and the eligible tax years, and gives the reason if relief is denied.
• If you disagree, you can ask in writing for a second administrative review, which the CRA asks you to do before applying for judicial review.
• Judicial review is in the Federal Court, using Form 301 Notice of Application, and it generally must be filed within 30 days of the CRA's notification.
• There is no right of objection to a VDP decision.

The CRA also reserves the right to audit any information in an application, whether or not relief is granted.

What to do next

Form RC199 can be filed through My Account, My Business Account or Represent a Client, or by fax or mail. Use one submission method only. If a representative submits it, both you and the representative must sign.

• Confirm no audit or investigation has begun on the issue.
• List the affected years and gather records for each.
• Estimate the tax owing and decide how you will pay.
• Complete and sign Form RC199, and prepare all corrected returns.
• Have a lawyer or accountant review the whole application before you submit.

Frequently asked questions