Voluntary Disclosure for Unfiled GST/HST Returns in Canada

If you run a business and have not filed or remitted GST/HST, the amounts can grow quietly through penalties and interest. Many owners hesitate because they are not sure whether coming forward helps or makes things worse.

The CRA's Voluntary Disclosures Program (VDP) can apply to GST/HST. This article explains how it works, the relief available and what a complete application looks like.

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

Which rules apply

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.

Older terms such as general and limited relief no longer apply to new applications. Relief now depends on whether your application is unprompted or prompted.

If you are unsure about applying, you may hold preliminary discussions with the CRA on an anonymous basis. These are informal and non-binding, and can be requested through the CRA's online callback form. An anonymous discussion is not an application, though. Relief requires a signed RC199 with full documents and payment, and an effective date of disclosure is only assigned once the CRA acknowledges the application.

What relief is available

For GST/HST the relief matches income tax. Unprompted applications get 75% interest relief and 100% penalty relief, and prompted applications get 25% interest relief and up to 100% penalty relief. These levels are limited by subsection 220(3.1) of the Income Tax Act, which requires the request to be made on or before the day ten calendar years after the end of the taxation year, so older periods may get reduced or no relief.

An application 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.

Exception: 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.

Relief does not reduce the tax. The VDP provides relief on penalties and interest, not on the tax itself. The CRA also reserves the right to audit any information in a VDP application whether or not relief is granted, and if fraud or misrepresentation is found, an assessment may cover any year.

When GST/HST relief is not available

• 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, which means the application is not voluntary.

A CRA letter on a specific issue does not by itself end eligibility. If you are not under audit or investigation, the application is treated as prompted.

What to file and how

The application consists of 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 CRA says it will consider fully completed applications only.

For GST/HST, 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, make reasonable estimates.

Use one submission method only: online (fastest), fax, or mail to the Voluntary Disclosures Program in Shawinigan, Quebec. Applications can be submitted any time of year. RC199 can be filed through My Account, My Business Account or Represent a Client, and the fillable PDF should be opened in Acrobat Reader 10 or later, not a web browser.

If a representative submits for you, both you and the representative must sign. The representative must be authorized on file with the CRA, or authorization documents must be included, and the name of any adviser who helped must be included.

What to do next

• Confirm whether the CRA has contacted you about the unfiled periods, and whether any audit has started.
• List each GST/HST reporting period that is unfiled or unremitted.
• Gather sales records, invoices and expense records, and estimate where records are missing.
• Work out the tax owing and decide whether you can pay now. If you cannot pay in full, you may ask for a payment arrangement on the application, but approval is not guaranteed.
• Speak with a tax lawyer or accountant before filing, because an incomplete application can be denied.

After you apply, the CRA sends an acknowledgement letter with the effective date of disclosure. The CRA does not publish a processing time, so plan without relying on one.

The CRA decision letter states the application type (unprompted or prompted), the relief level and the eligible tax years. If relief is denied, the letter gives the reason. The CRA's callback form can also be used to check the status of an application or ask about a decision letter.

If you disagree with a decision, you can ask in writing for a second administrative review by the Assistant Director of the Shawinigan National Verification and Collections Centre. The CRA asks applicants to do this before applying for judicial review. Judicial review is in the Federal Court, using Form 301 Notice of Application and the filing fee, and it generally must be filed within 30 days of the CRA's notification and follows the second review.

Frequently asked questions