GST/HST Voluntary Disclosure in Canada: Relief, Records, Limits

You may have found a GST/HST mistake, such as tax not collected, not remitted or reported wrongly. The CRA's Voluntary Disclosures Program (VDP) lets you come forward and correct it, and it may reduce the penalties and interest that would otherwise apply.

This article walks through how the program works for GST/HST: who can use it, what relief looks like, what records to gather, and what falls outside it. It is general information, and a lawyer or accountant can confirm how it applies to your facts.

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

Which rules apply to your application

GST/HST Memorandum 16-5-1 applies to VDP applications received on or after October 1, 2025. Its scope includes GST/HST, excise and several other taxes. Applications received earlier fall under Memorandum 16-5.

The program lets you correct errors or omissions. If your application is accepted, the CRA may give penalty and interest relief and will not refer the disclosed matter for criminal prosecution. The tax itself must still be paid in full.

An application is not voluntary if an audit or investigation has started against you or a related person. Investigations by other regulators, not only the CRA, can also count.

How much relief you can expect

The level of relief depends on whether your application is unprompted or prompted. An application is generally unprompted if the CRA has not communicated with you about the 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.

These are the GST/HST levels, and they match the income tax levels. A CRA letter about a specific issue does not by itself end eligibility. The application is treated as prompted if you are not under audit or investigation.

GST/HST wash transactions that qualify under Memorandum 16-3-1 can receive 100% relief of applicable penalties and interest, whether the application is unprompted or prompted.

Records you need to provide

For GST/HST and related taxes, supporting documents are required for the most recent four years. Clean periods in that window need not be included, and the CRA may ask for older periods at its discretion.

If books and records do not exist, you should make reasonable estimates. The CRA may request additional records, and years beyond the required periods are at its discretion.

• Identify which reporting periods contain errors or omissions.
• Collect invoices, returns and working papers for those periods.
• Prepare estimates, with a note on how you reached them, where records are missing.
• Keep the clean periods separate, since they need not be included.

What is not eligible

GST/HST relief is not available in these situations:

• The application seeks to make or alter an election.
• There is an insolvency event.
• Input tax credit increases lack a matching tax liability increase.
• An audit or investigation has started against you or a related person.

Other general exclusions include applications that produce a refund or no tax or penalties owing, and requests for relief on penalties or interest already assessed. A taxpayer who got VDP relief must stay compliant. A later application may be considered if the circumstances were beyond their control or concern a different matter.

Filing, payment and next steps

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

If you cannot pay in full, you may ask for a payment arrangement on the application, but the CRA's approval is not guaranteed. Use one submission method only: online, fax or mail. If a representative submits for you, both of you must sign, and the adviser's name must be included.

After receiving the application, the CRA sends an acknowledgement letter with the effective date of disclosure. Relief runs up to that date if you qualify. The CRA reserves the right to audit any information in your application whether or not relief is granted. The CRA does not publish a processing time.

• Confirm you are not under audit or investigation.
• Work out whether CRA contact makes your application prompted.
• Gather records for the most recent four years, leaving out clean periods.
• Estimate the tax owing and arrange payment or a payment arrangement request.
• If an adviser helped you prepare your application, include their name, because the application must name any adviser who helped.

Frequently asked questions