CRA Voluntary Disclosure Program Savings Calculator
Unreported income, unfiled years or foreign property you never declared. Compare what the CRA will assess if it finds you first against what a disclosure costs under the policy that took effect on 1 October 2025, including the gross negligence penalty that is usually the largest number on the page.
saved by disclosing
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How the Do-Nothing Exposure Is Built
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Eligibility Check
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Red Flags and Points to Settle First
What to Do Next
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Disclaimer: This calculator applies Information Circular IC00-1R7, the Voluntary Disclosures Program policy for applications received on or after 1 October 2025, together with subsections 162(1), 163(2), 162(7) and 161(1) of the Income Tax Act and the CRA prescribed interest rates from 2018 onward. Tax is spread evenly across the years entered. The gross negligence penalty at 50% of understated tax is shown as exposure, not as a certainty, because the CRA must establish knowledge or gross negligence. Relief under the programme is discretionary, is capped at ten years of information, and is not available where the taxpayer is under audit or investigation or where the non-compliance is considered egregious. This page is general information, not tax or legal advice, and a disclosure should not be filed without advice.
What the Programme Does, and What It Does Not
The Voluntary Disclosures Program lets a taxpayer correct an inaccurate or incomplete return, or file a return that was never filed, and receive relief from penalties and part of the interest. It also gives protection from prosecution on the information disclosed.
It does not forgive the tax. Every dollar of tax that should have been paid still has to be paid, and the application must include payment of the estimated amount. What the programme removes is the penalty layer, which on unreported income is frequently larger than the tax itself.
The number that decides this is the gross negligence penalty. Where the CRA finds unreported income and can establish knowledge or gross negligence, subsection 163(2) imposes a penalty of 50% of the understated tax. On $120,000 of tax that is $60,000, on top of late-filing penalties and daily compounded interest. An accepted disclosure removes it entirely.
What Changed on 1 October 2025
The CRA replaced the 2018 framework with Information Circular IC00-1R7. The old general and limited programs are gone. Relief now turns on whether the application is unprompted or prompted, and the change is materially more generous.
| Application Type | When It Applies | Penalty Relief | Interest Relief |
|---|---|---|---|
| Unprompted | No prior CRA communication about this specific issue | Up to 100% | Up to 75% |
| Prompted | The CRA has already raised this specific issue | Up to 100% | Up to 25% |
| Not available | Under audit or investigation, or egregious non-compliance | None | None |
Two things about that table are new and matter. A prompted application is now possible at all, where previously a CRA letter shut the door completely. And interest relief has risen from a maximum of 50% to 75%, and now includes the three most recent years, which the old policy excluded.
A general education letter does not make you prompted. The CRA has confirmed that where a taxpayer receives general guidance about a topic, identifies their own deficiency and comes forward, the disclosure is still treated as unprompted with access to the highest relief tier. What makes it prompted is communication about an identified compliance issue related to the disclosure.
What You Are Exposed to If You Do Nothing
| Penalty | Amount | When It Applies |
|---|---|---|
| Late filing, subsection 162(1) | 5% of unpaid tax plus 1% per month to 12 months | Any return filed late with tax owing |
| Repeat failure, subsection 162(2) | 10% plus 2% per month to 20 months | Demand issued and a prior penalty in three years |
| Gross negligence, subsection 163(2) | 50% of the understated tax | Knowing or grossly negligent false statement or omission |
| T1135 late filing | $25 per day to $2,500 per year | Foreign property above $100,000 not reported |
| T1135 additional penalty | 5% of the cost of the property | Failure exceeding 24 months after a demand |
| Failure to remit GST/HST | 3% to 10%, and 20% for a repeat | Tax collected and not sent to the CRA |
| Arrears interest, subsection 161(1) | Prescribed rate plus four points, compounded daily | Every unpaid balance |
The Normal Reassessment Period Does Not Protect You
Owners frequently assume the CRA cannot go back more than three or four years. That limit does not apply where a taxpayer has made a misrepresentation attributable to neglect, carelessness or wilful default, or committed fraud. In those cases the CRA can reassess any year, without limit.
Unreported income is exactly the fact pattern that opens the statute-barred years. Foreign property reporting has its own extended period as well, adding three years where a T1135 was required and not filed.
Foreign Property and the T1135
Specified foreign property with a total cost above $100,000 at any time in the year has to be reported on Form T1135. That includes foreign bank accounts, foreign real estate held for investment, shares of foreign corporations and interests in foreign trusts. It does not include personal-use property such as a holiday home you use yourself.
The base penalty is $25 per day to a maximum of $2,500 per year, which on ten years is $25,000 before any tax is considered. Where the failure continues beyond 24 months after a demand, a further penalty of 5% of the cost of the property applies. On a $1,000,000 foreign portfolio that is $50,000.
The Conditions for a Valid Disclosure
- It must be complete. A partial disclosure that leaves something out is worse than none, because it removes the protection for everything.
- A penalty or interest must apply or potentially apply. There has to be something to relieve.
- The information must be at least one year overdue for income tax, or one reporting period overdue for GST/HST.
- Payment of the estimated tax must be included, or a payment arrangement requested where the amount cannot be funded at once.
Who Cannot Apply
- Taxpayers under audit or criminal investigation for the matter being disclosed
- Cases the CRA considers egregious, including deliberate multi-year schemes and falsified documents
- Applications relating to bankruptcy proceedings in some circumstances
- Second applications on substantially the same issue, though the threshold for a second application has been lowered under the new policy
How the Process Works
| Stage | What Happens |
|---|---|
| Pre-disclosure discussion | Optional, no obligation, can be made on a no-names basis to understand the position |
| Application | Form RC199 with the full facts, the returns or amendments, and payment of estimated tax |
| Effective date of disclosure | The date the CRA receives the application, which is what protects you from that point |
| CRA review | Acceptance or rejection, with reasons, and the relief tier applied |
| Assessment | Returns processed, tax assessed, penalties relieved and interest reduced |
The date the application is received is what matters. Protection runs from that date, not from when the work is finished. Where the file is large, the application can be filed and the supporting information completed afterwards within the time the CRA allows. Filing the returns first, outside an application, forfeits the relief entirely. Our disclosures service handles the application, the returns and the negotiation.
What the Calculator Does Not Model
- Provincial penalties in Alberta and Quebec, which administer their own tax
- GST/HST specific relief, governed by a separate memorandum
- Criminal exposure, which is a matter for a lawyer rather than an accountant
- Interest on penalties from the date of assessment
- The cost of the professional work to reconstruct records and prepare the filings
- Solicitor-client privilege, which an accountant cannot provide and which matters where criminal exposure is possible
Frequently Asked Questions
Common questions from taxpayers considering coming forward.
Related Calculators and Guides
More tools for taxpayers bringing filings current.
The Protection Starts the Day We File the Application
Not the day the work is finished. Send us the years and the rough numbers. We confirm whether a disclosure is available, whether it is unprompted or prompted, and file Form RC199 with the outstanding returns as one engagement.