How does voluntary disclosure work for missed HST returns?
CRA’s Voluntary Disclosures Program (Information Circular IC00-1R6) lets you file overdue HST returns and pay the tax to obtain penalty relief and partial interest relief, provided your application is voluntary, complete, includes at least one filing more than one year overdue, involves a penalty, and includes payment of the estimated tax with the application.
Two tracks. General Program: full penalty relief and 50% interest relief on the years covered. Limited Program: no penalty relief on gross negligence but no gross-negligence penalty either; usually applies where CRA sees deliberate non-compliance. Application is Form RC199 plus a package of amended or original returns.
Example: an Ontario contractor stopped filing HST after their bookkeeper left in 2022. Three years of missing GST34s. They come forward on their own before any CRA contact, submit RC199 with all twelve missed quarters (Q1 2023 through Q4 2025), a spreadsheet reconstructing net tax owing of $78,000, and a payment for that amount. Under General Program, s. 280.1 late-filing penalties (potentially over $10,000) are waived and s. 280 interest is reduced by 50%. Files are otherwise treated as filed on time.
Do not file if CRA has already contacted you about the matter. Once CRA opens an audit or enforcement action on the specific period, the disclosure is no longer voluntary.
Note: A named-party disclosure identifies you at intake. A no-name disclosure (used to test eligibility) is no longer available after the March 1, 2018 program overhaul. Get the application right the first time.
Source: canada.ca â Voluntary Disclosures Program
— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA
Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.