CRA Expands Voluntary Disclosures Program 2025

The Canada Revenue Agency (CRA) has released updated guidelines on the new Voluntary Disclosures Program, which will take effect on October 1, 2025. The new Voluntary Disclosures Program has been expanded to include additional tax types. Furthermore, the updated guidelines provide explanations of what the Voluntary Disclosures Program entails, who is eligible for it, the types of relief available, and other essential details.

Scope and Eligibility Criteria

Starting from October 1, the Voluntary Disclosures Program (Program) will include all types of taxes, including income tax, the GST/HST, withholding taxes, excise duties, the luxury tax, the digital services tax, and tax under the Global Minimum Tax Act. 

To qualify for the Program, taxable persons must voluntarily apply,  and the application must cover a tax year that is at least one year past the filing deadline, and involve an error or omission that results in interest, penalties, or both. Additionally, those who apply for the Program must provide all relevant supporting documents, and any outstanding tax must either be paid or a payment arrangement requested.

If the application refers to disclosure aimed at obtaining a refund, concerns penalties or interest already assessed, attempts to make or change an election under tax law, involves insolvency, or relates to advance pricing arrangements or treaty-based agreements, it will be denied. Taxable persons whose application is granted may be relieved from penalties, interest, and criminal prosecution. However, the exact amount and type of relief granted to taxable persons depends on the nature of disclosure. 

As part of the procedure, the CRA determines whether the taxable person qualifies for general or partial relief based on whether the disclosure was made unprompted or prompted. Unprompted applications typically receive general relief, which includes complete relief from penalties and 75% relief from interest charges. In contrast, prompted applications generally qualify for partial relief, with up to complete penalty relief but only 25% interest relief.

Conclusion

By expanding the Program, CRA is enabling taxable persons, either individuals or businesses, to resolve tax compliance issues more effectively and efficiently. Additionally, the Program encourages taxable persons to voluntarily disclose any non-compliance with tax law, including omissions and errors, while reducing the risk and mitigating potential consequences.

Source: Government of Canada