What are the CRA Requirements for Record Keeping?
The Canada Revenue Agency (CRA) requires individual and corporate taxpayers to keep their records in case they are audited, or if the CRA wants a taxpayer to justify their income and / or expenses in another way.
CRA Requirements for Record Keeping – Where do I keep my Records?
Unless you have permission from the CRA, you must keep your records at your place of business or your residence in Canada.
Records that are kept outside of Canada and accessed electronically from inside Canada are not considered to be records kept in Canada.
In order to get permission to keep your records elsewhere, you must write to your tax services office. If you are granted permission, you must make your records available upon request for review by the CRA in Canada.
The CRA will not give permission to keep records outside of Canada to the following:
- Registered charities;
- Registered Canadian amateur athletic associations;
- Canadian municipalities;
- Public bodies performing a function of government; and
- Housing corporations resident of Canada and exempt from tax under Part 1 of the Income Tax Act.
The CRA could give you permission to store your electronic records outside of Canada. If so, the CRA may accept copies if:
- The CRA is satisfied that the copies of the records are true copies;
- They are made available to CRA officials in Canada in an electronic format readable by CRA software; and
- They show enough details to support the returns filed with the CRA.
CRA Requirements for Record Keeping – How Long Do I need to Keep my Records?
In general, you must keep all records and supporting documentation for a period of 6 years from the end of the last tax year they relate to. The tax year will be the fiscal period for corporations and the calendar year for individuals.
The 6 year rule applies to the following legislations:
- The Income Tax Act;
- The Excise Tax Act (includes the GST/HST);
- The Employment Insurance Act;
- The Canada Pension Plan;
- The Excise Act, 2001; and
- The Air Travellers Security Charge Act.
However, there are times when you must keep your record for longer. Some of these include:
- If you file an income tax return late, you must keep your records for 6 years from the date you file that return;
- If you have not filed a GST/HST return for a reporting period that ended more than 6 years ago, you are still required to file the return and retain the records to support the amounts reported on the return;
- If you filed an objection or an appeal, you must keep all necessary records until the latest of the following dates:
- The date the objection or appeal is resolved;
- The date for filing any further appeal has passed;
- The six-year record keeping period has passed;
- When a corporation is dissolved, it must keep the following records for 2 years after the date of its dissolution:
- All records and supporting documents to verify its tax obligations and entitlements;
- All other records that corporations have to keep;
- When you are the legal representative of a deceased taxpayer or trust, you can destroy the records after receiving a clearance certificate(s) to distribute property under your control.
CRA Requirements for Record Keeping – Am I allowed to Destroy my Records?
In order to destroy your records prior to the expiration of the mandatory period, you must get written permission from the CRA.
To obtain this permission, you or your authorized representative can:
- Complete Form T137, Request for Destruction of Records and;
- Apply in writing to your tax services office.
It is important to note that the CRA is not authorized to approve the destruction of records that you must keep under other federal, provincial, territories, or municipal laws.
If your records were destroyed due to a disaster, you need to contact the CRA to advise them of this.
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.