The Moroccan Tax Amnesty Program Yielded Promising Results
Morocco's 2024 tax amnesty, enacted under the Finance Law of 2024 and concluding December 31, 2024, targeted undeclared assets and income held before January 1, 2024. Deputy Minister Mustapha Baitas hailed it as "extremely fruitful," surpassing expectations with significant economic impact. The program aimed to formalize Morocco's economy, combat money laundering, and increase state revenue by encouraging taxpayers to declare hidden assets (cash, real estate, bank deposits) amid high cash circulation (25% of GDP, ~$42.8 billion).
Participants paid a preferential 5% tax rate on declarations made in 2024 (versus 37% in 2025). The program covered assets such as cash, property, and loans. Declared assets totalled $12.7 billion, with $10 billion from the main program ($6 billion in bank deposits, $4 billion in real estate/accounts) and $200 million from 658 foreign asset declarations.
Tax Amnesty Programs in Canada: The Voluntary Disclosures Program (VDP)
Canada'sVDP, administered by the CRA, is an ongoing amnesty program allowing taxpayers to correct past non-compliance (e.g., unreported income,offshore assets) without penalties or prosecution.
The VDP seeks to promote voluntary compliance, recover unpaid taxes, and strengthen tax enforcement, targeting both residents and non-residents with Canadian tax obligations. Taxpayers disclose unreported income or unfiled returns voluntarily, completely, and before CRA enforcement action.Penalties and criminal prosecutionare waived, but full tax and partial interest are still payable.
The VDP has proven a reliable tool for recouping unpaid taxes. Since its modern offshore compliance focus intensified around 2009, spurred by global leaks such as thePanama Papers, the CRA has recovered over $11 billion from offshore disclosures alone, according to estimates from audit reports and agency statements. Unlike Morocco's low-rate lure, the VDP's full-tax-plus-partial interest model ensures fairness but limits participation compared to more generous amnesties.
The VDP's success in encouraging voluntary compliance is harder to quantify due to limited data published by the CRA but is evident in its longevity, as it has remained in place since its formal introduction around 1975.
Pre-2018, a flurry of disclosures—especially before the March 1, 2018, rule change—suggested taxpayers rushed to benefit from more generous terms (e.g., no-names disclosures). Post-2018, the two-track system and elimination of anonymous filings reduced participation, as noted by Canadian tax professionals. This shift reflects a deliberate CRA pivot to prioritize fairness over leniency, targeting "sophisticated" evaders (e.g., corporations with $250 million+ revenue) with less relief.
Who Can Qualify for the VDP?
The VDP is open to a broad range of taxpayers, provided they meet specific conditions. Eligible applicants include:
- Individuals: Canadian residents (e.g., citizens, permanent residents) and non-residents with Canadian tax obligations (e.g., income from Canadian sources).
- Corporations: Businesses of all sizes, including Canadian-controlled private corporations and multinationals with Canadian tax liabilities.
- Trusts: Personal trusts, estates, or other trust entities with unreported income or filing obligations.
- Partnerships: Entities that need to correct tax filings or income allocations.
- Employers: For payroll-related errors (e.g., unreported source deductions).
- GST/HST Registrants: Businesses or individuals correcting sales tax errors under theExcise Tax Act.
- Essentially, any entity or person with a Canadian tax obligation can apply, as long as that entity has unreported income, unfiled returns, or other tax discrepancies to disclose.
To qualify for VDP relief, applicants must satisfy five mandatory conditions:
- Voluntary Disclosure: The disclosure must be initiated by the taxpayer, not prompted by CRA enforcement action (e.g., audits, letters, or investigations). If the CRA has already contacted you about the specific issue, you may be ineligible.
- Complete Disclosure: All relevant information—unreported income, assets, or unfiled returns—must be fully disclosed, with supporting documentation (e.g., bank statements, T-slips).
- Penalty Involvement: The disclosure must involve a penalty the CRA could assess (e.g., late-filing penalty under section 162(1), gross negligence penalty under section 163(2), or GST/HST penalties). Disclosures with no penalty risk (e.g., simple adjustments) don't qualify.
- One-Year Past Due: At least one tax period involved must be overdue by a year or more.
- Payment Capability: Applicants must pay (or arrange payment) at the time of application for the estimated tax owing.
Pro Tax Tip: Maximize VDP Relief by Timing Your Disclosure Before CRA Triggers
If you've got unreported income or unfiled returns—say, offshore investments/assets or rental income—don't wait for the CRA to knock. File a VDP application under the General Program before any CRA contact (e.g.,audit notice, nudge letter) to secure full penalty relief and potentially shave years of interest off your bill.
The CRA receives information related to taxpayers from various government agencies and organizations from around the world. Once the CRA starts inquiring, it may be too late, and the full tax bill plus penalties could be significantly higher, and you could even faceprosecution for tax fraud. For assistance with filing a voluntary disclosure application, contact one of ourtop Canadian tax lawyers.
FAQ
Do I need to submit payment with my VDP application?
If you cannot pay the estimated taxes owing with your Voluntary Disclosure Program application, you will need to make a payment arrangement when you submit the VDP application. Your disclosure will be effective as of the date that it is received by the CRA, even if it does not include payment. However, once the CRA accepts your voluntary disclosure, you will be responsible for paying any taxes owed or negotiating a payment plan.
Will my VDP submission be available to the public?
No, VDP packages will be treated confidentially. The VDP shares information collected with Revenu Québec, the Province of Ontario and the Province of Alberta by way of encrypted electronic communications for verification of enforcement action for the purposes of supporting the validity of the voluntary conditions of the VDP requests and to assist the provinces with the administration of their own VDP.
Circulation of hardcopy documents is controlled. VDP documents are kept in-house until completion of the file. Once completed, documents are sent and maintained at a private-sector contractor records storage facility, retained according to the Office of the Privacy Commissioner of Canada's Personal Information Retention and Disposal: Principles and Best Practices for a period of seven years and then destroyed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
