What VDP Canada Requires From Canadians

Do you know anything about the VDP Canada? The VDP or Voluntary Disclosures Program is managed by the Canada Revenue Agency. The program emphasizes compliance with the taxation laws followed in Canada. It is meant for businesses, individuals, employers, residents, non-residents and trusts. Through its VDP Canada program, the CRA motivates all the above mentioned parties to volunteer any piece of information they have withheld. It does not matter whether the information was omitted voluntarily or involuntarily.

Completing the VDP Canada forms can prevent serious problems in future with the taxman. The biggest mistake you can make is to assume that the CRA will never find out what you have been hiding. They have your records for all your past dealings with them. If you are very busy or outside the country, for business, you can use an authorized representative to submit your disclosure form. The VDP Canada program requires a lot of different information to be disclosed. Some of it includes:

  • Any important information about late tax returns you have never reported to the CRA.
  • Any unreported business or personal income whether earned within Canada or outside of Canada.
  • Unrevealed withheld taxes.
  • Late income tax returns
  • If you had claimed costs you were not owed
  • Any HST or GST errors/omissions
  • Any other undisclosed information, including source deductions.

Because the VDP Canada program aims to get people to volunteer tax information voluntarily, some of you may find grounds to dodge it. But there is a major advantage to complying: you would pay only the tax returns you owe the CRA plus the interest. Penalties and a probable court case can be avoided. A legitimate VDP Canada disclosure has to meet a few conditions as shown below:-

  • It should be voluntary, meaning you will submit it prior to realizing that the CRA is after you for failure to comply with the tax laws.
  • It should be complete, containing all the information that is required to verify that your VDP is valid. If you have other undisclosed businesses or parties, mention them in your report.
  • It should contain previously undisclosed tax information that is over one year late.

In order to send a voluntary disclosure, you should fill and sign the Form RC199. This VDP Canada form can be found on the official website of CRA. Another method is to write and send a letter, giving information that is similar to the Form RC199. Authorizing or Cancelling a Representative Form T1013 is available to anybody who is asked to submit the VDP form on behalf of another person.

A VDP Canada entails the Business Consent Form RC59 too, that can be completed and signed by an authorized representative and then faxed or sent by mail to the CRA offices. The Canada Revenue Agency has published its contact details in terms of provinces. After submissions are over, you can then wait for the acknowledgement letter from the CRA to arrive. The VDP process can be quite lengthy and complex so it is also best to have a tax professional to step in to ensure a smooth and accurate process.