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The CRA has overhauled the Voluntary Disclosure Program’s (VDP) structure, relief formulas, and documentation expectations. These changes materially affect how VDP files are handled. The following table summarizes the key differences between the two programs.
Key Differences at a Glance
| Topic | Old program – IC00‑1R6 (2017) | New program – IC00‑1R7 (2025) | Practical implication |
| Program design | Two tracks: General vs Limited (generally included intentional conduct indicators, large‑corp threshold). | Two outcomes based on voluntariness context: Unprompted vs Prompted. | Simpler framework; classification now turns largely on whether CRA (or another authority) has flagged a specific issue. |
| Voluntary standard | “Enforcement action” was broad: CRA requests/demands, direct contact, third‑party leaks could defeat voluntariness. | Not voluntary only when an audit or investigation has been initiated against the taxpayer or a related taxpayer on the issue disclosed. Other CRA communications usually make the file prompted, not ineligible. | Many cases that would have been ineligible in the old program can now still enter the VDP, albeit as prompted. |
| Penalty relief | General: 100% of applicable penalties. Limited: Gross negligence penalty waived; other penalties still apply. | Unprompted: generally, 100% of applicable penalties. Prompted: up to 100% of applicable penalties (discretionary). Gross negligence penalties won’t apply on accepted disclosures. | Prompted files receive penalty relief – a major shift from IC00‑1R6’s Limited track. |
| Interest relief | General: 50% interest relief for years preceding the three most recent filing years; no interest relief for the three most recent years. Limited: none. | Unprompted: generally, 75% interest relief. Prompted: generally, 25% interest relief. | A clearer, percentage‑based model replaces the “older years vs last three years” split. Unprompted files benefit more; prompted files get some interest relief that didn’t exist before. |
| Look‑back limitation | 10‑year limitation for penalty and interest relief (per subsection 220(3.1) of the Income Tax Act (“ITA”)). | 10‑year limitation for penalty and interest relief. | No change in the look‑back period. |
| Documentation | Disclosure must be complete for all relevant years. | Must disclose all known errors/omissions, but supporting documents are expected for 6 years (or 10 years if the errors relate to assets or income outside Canada). CRA can still request more documentation. | Practically, assemble 6 years (domestic) / 10 years (international) as a baseline package; be ready to extend if asked. |
| Large‑corp presumption | Corporations with > $250M gross revenue in ≥2 of last 5 years were generally routed to the Limited track. | No revenue threshold appears in IC00‑1R7. | Big filers are no longer presumptively disadvantaged by policy design. |
| Third‑party leaks / sector letters | Could defeat voluntariness or push into Limited track. | Education letters still count as unprompted; third‑party info in CRA’s hands generally yields prompted (partial relief), not ineligibility. | Taxpayers can act fast after sector outreach; they can likely still secure unprompted status if it was only an education letter. |
| Scope of taxes covered | Income tax, source deductions, GST/HST, excise, ATSCA, Softwood. | Expanded: adds fuel charge (GGPPA Part I), Luxury Tax, Underused Housing Tax, Digital Services Tax, and Global Minimum Tax. | VDP is now a unified on‑ramp for several newer federal tax regimes. |
| Waiver of objection rights | Limited Program required a waiver of objection/appeal rights for the matter disclosed (with narrow carve‑outs). | No waiver requirement appears in IC00‑1R7. Statutory bar on objecting to subsection 220(3.1) interest/penalty relief decisions remains per subsection 165(1.2) of the ITA. | More balanced dispute posture post‑disclosure; standard objection rights on the underlying tax assessment are not curtailed by a VDP‑specific waiver. |
| Eligibility where only interest applies | VDP required actual or potential penalties. | Eligibility refers to an error/omission with applicable interest, penalties, or both. | Files with interest but no penalty exposure can now be viable candidates (subject to discretion). |
| Pre‑disclosure discussion | Anonymous, informal, non‑binding; access to specialized areas for complex issues. | Still anonymous and non‑binding; used to understand risks/relief before naming the taxpayer. | Keep using this to “triage” and test theory without burning voluntariness. |
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