CRA makes some favourable changes in finalizing its revised Circular on the VDP

Some points of departure in the final version of the Circular on the Voluntary Disclosure Program from the previous draft Circular:

• The effective date is now March 1, 2018, meaning that to fit within the previous more-lenient program, the application, including the taxpayer’s name, must be received before that date. For those needing no-names comfort before proceeding, this means that the real effective date is earlier.
• The “Limited program,” under which there is relief only from gross negligence penalties and prosecution, is now expressed to apply “where there is an element of intentional conduct on the part of the taxpayer or a closely related party” – whereas the draft Circular referred more vaguely to “major non-compliance.”
• CRA however also states (perhaps somewhat in contradiction to the above):

Generally, 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 be considered under the Limited Program.

• CRA has added a statement (perhaps to demonstrate flexibility - see Stemijon/Elfe Juvenile) that “If [VDP] relief is denied ... relief of arrears interest and any penalties payable may be requested and considered in accordance with the taxpayer relief provisions as described in IC 07-1R1... .
• CRA has deleted a statement that the VDP does not extend to transfer pricing adjustments or s. 247 penalties (although competent authority matters are now explicitly excluded), and now states:

Given the complexity of transfer pricing issues, applications relating to transfer pricing matters will be referred to the Transfer Pricing Review Committee for their consideration under subsection 220(3.1).

Neal Armstrong. Summary of 15 December 2017 Information Circular - IC00-1R6 - Voluntary Disclosures Program under s. 220(3.1).