Who this is for
Anyone with unreported income or an unfiled form from past years: rental income, side income, platform earnings, foreign income, the T1135, GST. Especially people who have received an education letter from the CRA and assumed it was too late.
What changed on October 1, 2025
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Two kinds of application. Unprompted: you come forward with no CRA communication about the issue. Prompted: the CRA has sent a communication about a potential non-compliance issue, for example an education letter about unreported income or ineligible expenses.
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Relief levels. Unprompted: 100% penalty relief and 75% relief of interest. Prompted: up to 100% penalty relief and 25% interest relief. The relief is on penalties and interest; the tax is paid in full.
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Who is excluded. Anyone under audit or investigation for the issue, and anyone whose non-compliance was egregious. The program is a second chance for mistakes and omissions, not for deliberate schemes.
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What to include. The application covers the years and the supporting documents. Generally ten years for foreign income and assets, six years for Canadian income and assets, four years for GST.
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Protection from prosecution. An accepted disclosure also protects against criminal prosecution for the disclosed matter, which is why it must be complete.
One thing many people do not realize
A CRA letter does not automatically end your chance to disclose. Under the rules in effect since October 1, 2025, a letter about a potential issue makes your application prompted rather than unprompted. That reduces the interest relief from 75% to 25% but can still remove the penalties. What does end it is an audit or investigation already under way. The gap between a letter and an audit is the window.
What to prepare
- Any CRA letter received, with its date
- What was not reported, for which years, and roughly how much
- The records that exist: bank statements, foreign statements, platform reports, slips
- Returns filed for those years
When professional help may make sense
Every disclosure. The application must be complete, the years must be right, and the timing matters because an audit notice closes the window. A disclosure that misses something can lose its protection.
How Rex Tax may be able to help
We assess eligibility, prepare the application and the corrected returns, and manage the correspondence. We do not promise a particular outcome; the CRA decides each case. Our guides on unfiled returns and on the T1135 cover the two most common situations.
Official sources
- CRA: Changes to the Voluntary Disclosures Program (effective October 1, 2025)
- CRA: What is the Voluntary Disclosures Program
- CRA: Information Circular IC00-1R7, Voluntary Disclosures Program
This guide is general information, not advice about your situation. It reflects the rules for the 2025 and 2026 tax years. Rules described are those in effect from October 1, 2025. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.