Minister of National Revenue Announces Significant Changes to Voluntary Disclosure Program

On December 15, 2017, the Honourable Diane Lebouthillier, Minister of National Revenue, announced changes to the Voluntary Disclosure Program (VDP) to revise the criteria for VDP participation and ensure the program fulfills its mandate to allow Canadians to correct honest mistakes. Beginning March 1, 2018, a limited program will apply to taxpayers who have intentionally avoided their tax obligations. In addition, this limited program will also apply to corporations with gross revenue exceeding $250 million. The Minister also commented that this new VDP is anticipated to be in effect for two years, after which further tightening may be introduced based on the feedback received and a review of the results of this new program.

The formal changes to the VDP include:

• creation of a new Limited Program, offering more limited relief to taxpayers who intentionally avoided tax obligations;
• introduction of a requirement to pay the estimated taxes owing in order to qualify for the VDP;
• canceling relief where the taxpayer misrepresented the situation on the application; and
• elimination of the no-names basis process for disclosures.

While the no-name disclosure process is no longer available, the Canada Revenue Agency (CRA) encourages taxpayers to participate in preliminary discussions concerning their situation to help them understand the relief that may be available and the potential risks associated with continued non-compliance with the provisions of the Excise Tax Act. These discussions may take place prior to the identity of the taxpayer being disclosed and will be handled informally and are non-binding on the CRA.  

Additional information is available in GST/HST Memorandum 16.5, “Voluntary Disclosures Program.”