Under CRA rules, you generally need to keep your business records for six years from the end of the last tax year they relate to. You can destroy them sooner only with the CRA’s permission. If you keep records on a computer, those electronic records need to be kept as well, not just printouts.
How the six-year clock works
The six years don’t start on the day you create a document. They run from the end of the last tax year the record relates to. An invoice from March 2021 supports the 2021 tax year, so for a calendar-year business the six years start counting at December 31, 2021.
What this covers
- Sales and purchase records, invoices and receipts
- Bank statements and cancelled cheques
- Payroll records
- The source documents that support your tax returns, GST/HST filings and deductions
- Records created by your accounting, point-of-sale or tax software
The records need enough detail for the CRA to work out your tax obligations and entitlements. The CRA can examine, audit and review your record-keeping systems and copy any of your records, including electronic ones.
Where records are kept
The CRA’s guidance says records are to be kept at your Canadian residence or place of business unless it gives you permission to keep them elsewhere. If you’re thinking about moving boxes to an off-site facility, confirm the arrangement with your accountant first. And if a bookkeeper or accountant holds your records for you, you’re still the one responsible for them being adequate.
What the six years don’t cover
Some documents are kept longer than six years, such as corporate minute books and records tied to a dissolved company. The CRA points to its Information Circular IC78-10 for those cases, and your accountant can tell you what applies to you.
What to do with older records
Records past the retention period are a liability, not an asset. They take up space, they may contain sensitive customer and employee information, and they can be requested in a dispute. A sensible cycle looks like this:
- Keep a written retention schedule so everyone knows when each record type expires.
- Scan records you need to keep so the working copy is searchable and the paper is no longer taking up space.
- Store what you must keep securely, with fast retrieval when you need a file.
- Shred what has reached the end of its period, and keep proof that it was destroyed.
How we help
Records Management Ltd. will scan, index and securely shred paper files such as invoices, purchase orders and minute books, and give you a digital, searchable copy. If you’d like to see what that would look like for your files, we can quote it.
Get a quote for scanning and shredding.
Related reading
- Records management for accounting firms
- Document scanning and storage services
- Secure shredding services
Sources and further reading
This article is general information, not tax or legal advice. Confirm your situation with your accountant or the CRA’s “Keeping records” guidance.