The Voluntary Disclosure Program (VDP) allows taxpayers with an opportunity to come forward and correct inaccurate or incomplete previously filed returns or to file returns that have not been filed. The VDP provides relief of penalties, however, taxpayers still have to pay any taxes owing plus any interest.
The Canada Revenue Agency (CRA) has proposed number of changes to the VDP. The changes (Information Circular IC00-1R6), effective on March 1, 2018 (an extension from the original proposed effective date of January 1, 2018) . The changes seem like to reduce or eliminate the availability of the VDP. These include:
- The introduction of two tracks of disclosures, general and limited programs.
- The inclusion of payment of the estimated tax owing at the time of the VDP application.
- The elimination of the no-names disclosure.
- The exclusion of corporations with gross revenue over $250 million or involve transfer pricing.
It should be noted that CRA reserves the right to audit any information provided in the VDP application, and to reassess any tax year – not just the years disclosed, whether it is accepted into the program or not.