Who has to keep records
You have to keep records if you:
- Run a business or any other commercial activity
- Have to collect or pay taxes, such as GST/HST or payroll deductions
- Have to file an income tax or GST/HST return
- Apply for a GST/HST rebate or refund
Charities, non-profit organizations and trusts keep records too. So do inactive corporations and holding companies. If you run more than one business, keep separate records for each.
What to keep
Your records are your books plus the documents behind every entry:
- Sales invoices, receipts and contracts
- Bank and credit card statements, deposit slips and cancelled cheques
- Payroll records, if you have employees
- Your income tax and GST/HST returns, and the CRA’s assessments
- A logbook for any vehicle you use for business
- Purchase and sale documents for property and equipment
Records have to be complete and reliable enough to work out what you owe and what you can claim.
Paper or electronic
Either is fine, but the rules differ:
- Born electronic, kept electronic. If a document was created, sent or received electronically, keep the electronic version, even if you print it.
- Scanning paper. Scanned images count as originals if you follow proper imaging practices. After that you can destroy the paper.
- Changing software. Keep the ability to open the old data, or export it to a readable format first.
- Backups. Keep copies of electronic records, and make sure they can be restored.
Where to keep them
Keep your records at your place of business or your home in Canada. To keep them anywhere else, you need the CRA’s written permission, and that includes electronic records stored outside Canada that you only open from here. You have to show your records to the CRA when asked.
How long to keep them
| Records | Keep them |
|---|---|
| Most records | Six years from the end of the tax year they relate to |
| Records for a return filed late | Six years from the date you filed |
| Purchases and sales of property, share registers, and history that matters if the business is sold or wound up | Indefinitely |
| A dissolved corporation’s records | Two years after the dissolution |
| Records for an objection or appeal | Until it is resolved and the time to appeal has passed, if that is later than six years |
The tax year is the calendar year for individuals and the fiscal period for corporations. To destroy records sooner, ask the CRA with Form T137 or in writing. Destroying records early without permission can lead to prosecution, and the CRA’s permission does not cover records other laws require you to keep.
Payroll records
If you have employees, also keep the hours each one worked, what you deducted and remitted, their TD1 forms, any CRA letters reducing their deductions, and copies of every slip and return. This applies even when a payroll service runs your payroll.