On October 1, 2025, the Canada Revenue Agency (CRA) updated its Voluntary Disclosures Program (VDP) to make it easier for taxpayers and registrants to correct unintentional errors or omissions in their filings. If you run a business in Calgary or are a sole proprietor, understanding these changes could help you avoid penalties and interest while getting back on track with the CRA.
What Has Changed?
1. A Simpler Application
The CRA has improved Form RC199, making it easier to complete and submit. This simplified form helps reduce confusion and streamlines the process for taxpayers looking to correct past mistakes.
2. Expanded Eligibility
Previously, only certain taxpayers could participate in the VDP. Now, the program is less restrictive:
- Taxpayers and registrants who are prompted by CRA communications—for example, receiving an education letter about unreported income or ineligible expenses—can now apply.
- Exceptions: The CRA still restricts access for those under audit, investigation, or who were egregiously non-compliant.
3. Updated Relief Options
The VDP now offers two tiers of relief depending on the type of application:
- General Relief: Typically for unprompted applications. Offers 75% relief on interest and 100% relief on penalties.
- Partial Relief: Typically for prompted applications. Offers 25% relief on interest and up to 100% relief on penalties.
4. Documentation Requirements
When submitting a VDP application, it’s important to include the right supporting documents, such as returns, statements, and schedules needed to correct the non-compliance.
For cases spanning multiple years, the CRA recommends including documents for:
- Foreign-sourced income or assets: The most recent 10 years
- Canadian-sourced income or assets: The most recent 6 years
- GST/HST: The most recent 4 years
Note: Tax years with no errors or omissions do not need to be included, though the CRA may request additional documents if necessary.
Why This Matters for Calgary Businesses
These changes make the VDP more accessible and provide an opportunity to reduce penalties and interest while staying compliant with the CRA. For Calgary businesses, this means a chance to correct past errors confidently and maintain good standing with tax authorities.
If you’re unsure whether your business qualifies for the VDP or need help preparing your application, Me Consulting can guide you through the process, ensuring all documentation is accurate and complete.
Contact us today to learn how we can help you take advantage of the updated VDP and keep your business compliant.
