The Voluntary Disclosures Program (VDP), administered by the Canada Revenue Agency (CRA), allows Canadian taxpayers to voluntarily disclose previously undeclared income, correct past filed tax returns, or provide omitted information. By using the VDP, taxpayers can avoid penalties and prosecutions that might otherwise result from past non-compliance.

Eligibility and Limitations

Taxpayers can use the VDP to address various compliance issues, such as failing to report taxable income, not disclosing GST/HST or excise taxes, claiming ineligible or overstated expenses, failing to remit employees’ source deductions, not filing required information returns, or omitting foreign-sourced income. However, the program is not available for certain matters, including rollover provisions, elections, advance pricing arrangements, bankruptcy tax returns, or post-assessment requests. Additionally, the VDP only applies to the last ten years of a taxpayer’s tax matters.

General and Limited Programs

The CRA categorizes VDP applications into two streams: the General Program and the Limited Program. The General Program offers partial interest relief and waives penalties, while also providing protection from criminal prosecution. On the other hand, the Limited Program is designed for cases involving intentional errors. While it also offers protection from criminal prosecution and gross negligence penalties, other penalties may still apply, and interest will be charged on amounts owing. Eligibility for either program is determined by the CRA on a case-by-case basis.

Assessment and Strategy

At KR Law Firm, we begin by conducting a thorough assessment of your tax situation to determine eligibility for the VDP. This includes reviewing the voluntariness of your disclosure, ensuring the completeness of the information provided, and calculating the estimated taxes due. We understand the sensitivity and potential risks involved in making a voluntary disclosure and work closely with you to develop a strategy tailored to your unique circumstances.

Preparing Your Application

Once it is determined that the VDP is the appropriate course of action, we meticulously prepare your application. This involves gathering all necessary documentation and drafting a detailed submission that addresses the CRA’s requirements. Our goal is to present a strong and thorough application that positions you favorably in the eyes of tax authorities.

As your representatives, we handle all communications and interactions with the CRA throughout the VDP process. This includes advocating on your behalf and ensuring that your application is processed efficiently and fairly. Our proactive approach is designed to secure the best possible outcome and provide you with peace of mind.

Post-VDP Support

After your VDP application is accepted, we continue to provide support by offering guidance on future tax compliance and planning strategies. We work with you to address any areas of concern identified during the disclosure process and help you implement measures to prevent similar issues in the future. With KR Law Firm, you can move forward with confidence, knowing that your tax matters are in order.