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The Canada Revenue Agency and Quebec Minister of Revenue have Voluntary Disclosure Programs (VDP) that allow taxpayers who have not fulfilled their tax obligations to voluntarily rectify their situation without facing penalties and potential legal prosecution.
These penalties can be substantial – often in excess of 50% and even 100% of the taxes owing. When a Voluntary Disclosure application is accepted, the taxpayer only pays the relevant taxes owed plus interest. These programs are not meant for all situations and have certain restrictions, and taxpayers should consult with a professional before initiating a Voluntary Disclosure.
Taxpayers are expected to remain compliant after their Voluntary Disclosure. In order for a Voluntary Disclosure to be valid, it must meet all of the following conditions:
When the conditions are met, Voluntary Disclosure Program relief may be granted in cases that:
(Note – these are only general guidelines) While the Canada Revenue Agency and Revenu Québec programs have similar conditions to qualify, the respective agencies have very different approaches when processing Voluntary Disclosures.
When initiating a Voluntary Disclosure, the taxpayer can either:
There are pros and cons with both of the above options, which should be reviewed prior to initiating contact with the CRA and RQ.
For more information about the Canada Revenue Agency Voluntary Disclosure Program click here.
For more information about the Revenu Québec Voluntary Disclosure program, click here.
For more information about the recent changes to Revenue Québec’s Voluntary Disclosure program, click here.
Our office has processed a large number of voluntary disclosures with both the Canada Revenue Agency and the Quebec Minister of Revenue. We have developed systems to efficiently summarize financial information and create reports designed present information in a format acceptable to Voluntary Disclosure processing officers with both the Canada Revenue Agency and the Quebec Minister of Revenue.
Contact us on a strictly confidential basis if you have questions regarding the VD program.
Our office is located in Montreal, Quebec, and we can assist with both Canadian and Quebec submissions.
UHY Victor LLP Canada U.S. Tax Team