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VDP: Comparing the general and limited programs

A number of factors need to be considered before filing a voluntary disclosures program application, including the size of the sum in issue and whether any intentional conduct was involved

Mid adult African American man having taxes to payThe notion of intention is key in determining whether the general or limited VDP program applies (Getty Images/DjelicS)

Practitioners who deal with cases under the CRA’s Voluntary Disclosures Program typically prefer to pursue the general program which, as the CRA points out, is intended for taxpayers who want to come forward and correct unintentional errors. But there is a limited program as well. According to the CRA, this generally applies to taxpayers who have somehow intentionally avoided their tax obligations.

Here are some more comparisons between the two programs.


The general and limited programs lead to different results:

  • Taxpayers using the general program will be eligible for relief from prosecution and penalties and, in some cases, from a portion of the interest owing.
  • Those who use the limited program will not be referred for criminal prosecution related to the information they disclose, and will not be charged for gross negligence penalties. However, they will be charged other penalties as applicable. Also, no interest relief will be provided.


The CRA sets out a number of factors that come into play in deciding which program applies:

  • The dollar amounts involved
  • The number of years of non-compliance
  • The sophistication of the taxpayer
  • How quickly the taxpayer acted to correct their non-compliance upon its discovery.

As it points out, other factors may also be considered:

  • There had been deliberate or wilful default or carelessness amounting to gross negligence
  • Avoiding detection through the use of offshore vehicles or other means (for example, a taxpayer who opened an offshore bank account in 2010 and has been transferring undeclared business income earned in Canada to that account since that time would not normally qualify under the general program)
  • The CRA observes that applications by corporations with gross revenue in excess of $250 million in at least two of their last five taxation years, and any related entities, will generally be considered under the limited program.


Although he deals with VDP cases on a fairly regular basis, CPA David Posner, a partner with Zeifmans, has never used the limited program. But Mark Tonkovich, who leads the tax controversy and litigation group at Blake, Cassels and Graydon LLP, says some of the cases he sees may initially appear to fall under it.

“We often deal with tax controversies involving large corporations, so they may meet some of the CRA’s criteria,” he says. “For example, they may have had gross revenue in excess of $250 million in at least two of their last five taxation years.”

Even so, Tonkovich stresses that the notion of intention is key in determining which program applies. “You can have substantial tax errors for multiple years by very large companies, yet there might not have been any intentional conduct. A perfect storm of events might have come together, and the taxpayer only discovered the errors after the fact but then took steps to resolve them as soon as possible. So when we first look at the issue, there may be indications that it would fall under the limited program, but that's not necessarily the case.”

That’s why Tonkovich says a preliminary assessment of the error and how it arose is absolutely essential. This also allows for weighing other considerations, such as whether a VDP application is the best remedy. “Not every prior tax error is a great candidate for a VDP application. It is important to consider its significance and whether there might be other paths to resolve the issue, as well as the work involved and whether the information is available to properly satisfy all the requirements of the VDP program. It is also good to keep in mind that a second application by the same taxpayer will usually be viewed with greater scrutiny, and that taxpayers are expected to fully get their houses in order and remain compliant after an initial filing.”


Learn more about how to use the Voluntary Disclosures Program, as well as the CRA’s objections process  and taxpayer relief program. Plus, keep up to date on important tax issues with our tax blog.