CRA Voluntary Disclosure Program 2025: Everything You Should Know
Learn how the 2025 CRA Voluntary Disclosure Program helps correct tax mistakes. Get expert advice from a CRA accountant to maximize relief.
If you’ve missed filing tax returns, forgotten to report foreign assets, or skipped GST/HST filings, the Canada Revenue Agency (CRA) provides a way to fix these errors through the Voluntary Disclosure Program (VDP). This program allows taxpayers to correct past mistakes, avoid the harshest penalties, and in some cases, steer clear of prosecution.
With the new Information Circular IC00-1R7 effective October 1, 2025, the rules for eligibility have become simpler and more transparent. A CRA accountant can guide you through the updated process to make sure you get the most benefit.
Challenges with the Old System
Previously, many honest taxpayers were disqualified because the CRA considered certain administrative notices as “prompts,” even if no audit had started. Common issues included:
- Receiving a non-filer or demand-to-file letter and being barred from the VDP.
- Letters being overlooked by taxpayers but still disqualifying them.
- Confusion over which notices made a disclosure “prompted.”
This strict approach discouraged people from voluntarily correcting mistakes.
What’s Changed in 2025
The IC00-1R7 update clarifies the rules, distinguishing between prompted and unprompted disclosures.
| Notification Type | Previous Policy | New Policy (IC00-1R7) |
|---|---|---|
| Education or reminder letters | Often disqualified | Eligible – 100% penalty relief + 75% interest relief |
| Non-filer / demand-to-file letters | Frequently denied | Eligible – 100% penalty relief + 25% interest relief |
| CRA audit or investigation underway | Disqualified | Still disqualified |
| Investigation by another agency | Ambiguous | Disqualified if same issue is under review |
| Self-initiated disclosure | Uncertain | Fully eligible – 100% penalty relief + 75% interest relief |
Even if your disclosure is classified as “prompted,” you still receive considerable relief. A CRA accountant can help determine your situation and maximize your benefits.
Relief Levels
- Unprompted Disclosures:
- 100% penalty relief
- 75% interest relief
- Protection from prosecution
- Prompted Disclosures:
- 100% penalty relief
- 25% interest relief
- Protection from prosecution
This is a significant improvement over previous rules, making relief accessible to more taxpayers.
When You Are Not Eligible
The VDP is unavailable if:
- The CRA has already begun an audit or investigation on the issue.
- Another regulatory or law enforcement agency is investigating the same facts.
Timing is crucial. A CRA accountant can help you act before an audit or investigation makes you ineligible.
How a CRA Accountant Can Help
Engaging a CRA accountant provides several benefits:
- Assess your eligibility under the updated IC00-1R7 rules.
- Prepare and submit your disclosure correctly.
- Maximize penalty and interest relief.
- Communicate with the CRA on your behalf.
For complex situations involving multiple years, foreign reporting, or GST/HST, professional guidance ensures compliance and peace of mind.
Take Action Now
The 2025 updates to the VDP have made the program fairer and more predictable. However, you must act before the CRA starts an audit or investigation.
If you have unfiled returns, missed foreign asset reporting, or GST/HST errors, a CRA accountant can help you come forward voluntarily and secure the maximum relief available.