Adequate records have to be kept by individuals, partnerships, corporations, and trusts, as identified below:
Note
Even inactive corporations and holding companies have to keep certain records.
Here is a listing of the ways that you can keep records:
Supporting documents are required for each of the above methods and may be kept in either paper or electronic format (including electronic imaging format).
Your books and records:
For more information about requirements for corporations, trusts, registered charities, registered Canadian amateur athletic associations, registered agents for registered political parties, official agents for candidates in a federal election, agents authorized under the Senate Appointment Consultation Act, hospitals and non-profit organizations, see Guide RC4409, Keeping Records.
You have to keep all records that are in paper format, unless you keep them in an acceptable microfiche, microfilm, or electronic image format. Electronic imaging software is a popular method of keeping scanned images of paper documents, books, and records.
We consider you to have electronic records if you create, process, maintain, and store your information in an electronic format.
You have to keep your electronic records in an electronically readable format, even if you have paper printouts of those records.
If any of your source documents are first created, transmitted, or received electronically, you have to keep them in an electronic format.
Scanned images of paper documents, records, or books of account that are kept in electronic format are acceptable if proper imaging practices are followed and documented.
You are responsible for keeping records if you are carrying on a business or engaged in a commercial activity in Canada.
Note
Persons carrying on more than one business must keep separate records for each business.
Your records whether in paper or electronic format, have to:
Note
Persons carrying on more than one business must keep separate records for each business.
We consider you to have electronic records if you create, process, maintain, and store your information in an electronic format.
You are required to retain your electronic records in an electronically readable format, even if you have paper printouts of the electronic records.
If any of your source documents are initially created, transmitted, or received electronically, they must be retained in an electronic format.
If you record any business transactions or business information on a computerized system:
Your records must be kept at your place of business or at your residence in Canada, unless CRA gives you permission to maintain them elsewhere. To request permission, write to your CRA tax services office.
After conducting a review, Revenue Canada will let you know in writing whether or not you have a permission, and what, if any, terms and conditions apply.
When CRA have given you permission to maintain your records outside of Canada, they must be made available in Canada for review upon request. Otherwise, you must allow Canada Revenue Agency officials to review the records by traveling to the country where they are maintained at the expense of your business.
Exception
In the case of registered charities and registered Canadian amateur athletic associations, the records must be kept at a location inside Canada.
You have to keep all of the records and supporting documents that are required to determine your tax obligations and entitlements for a period of six years.
This six-year period starts at the end of the tax year to which the records relate. The tax year is the fiscal period for corporations and the calendar year for all other taxpayers.
Records and supporting documents concerning long-term acquisitions and disposal of property, the share registry, and other historical information that would have an impact upon sale or liquidation or wind-up of the business must be kept indefinitely.
Note
Revenue Agency may require you to keep records for an additional period of time. If this is the case, you will receive details by registered letter or by a demand served personally by one of our representatives.
If you get written permission from CRA, you may destroy your books and records earlier than the six-year period mentioned above.
To get permission, complete Form T137, Request for Destruction of Books and Records, or write to your tax services office.
Note
The permission only applies to records that are required to be kept under the legislation we administer. We have no authority to approve the destruction of records that are required to be kept under other federal, provincial, territorial, and municipal laws.
If you destroy paper or electronic records without the express permission of the CRA, you may be subject to prosecution.
If you deduct Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums, or income tax from remuneration or other amounts you pay, you must keep records of:
You also have to keep the following documents:
You must keep all these records so that we can verify or review them, on request.
Businesses that use service bureaus, payroll providers, or similar institutions to handle payroll functions are still responsible for keeping records for the time period specified, generally six years. Payroll records can be kept in either paper or electronic format. We recommend that you keep electronic copies of your records at your business location.
Your obligations for maintaining, retaining, and safeguarding books and records when conducting business over the Internet are the same as for any other type of business operation.
These records must be sufficient to determine and verify your tax obligations.
You must keep your business records for a minimum of six years from the end of the latest year to which they relate unless written permission is given by the Canada Revenue Agency.
Your records:
If you record any business transactions or business information on a computerized system:
Imaging means generating a readable reproduction of an original paper source document. The images can be produced by scanning the paper source documents to electronic files or by creating microfiche or microfilm.
Imaging a paper source document generally involves:
You must keep the original version of records. You may, however, produce an electronic image of a paper document, which then can be accepted as the original record provided you follow certain procedures. Imaging and microfilm (including microfiche) reproductions of books of original entry and source documents have to be produced, controlled, and maintained according to the latest standards set by the Canadian General Standards Board.
Businesses using commercial software for smaller scale electronic scanning of their paper records and supporting documents should ensure that their scanned records meet the rules and guidelines set out in the latest national standard of Canada.
You can destroy paper books of account and source documents if they have been imaged in accordance with the Canadian General Standards Board publication. These images become the permanent records. If you have any doubt, get legal advice first.
You should make back up copies of all your business information that has been recorded on rewritable media, such as computer hard disks, floppy disks, CDs, DVDs, tapes, and cartridges. This will ensure that you do not accidentally lose, delete, or erase this information.
You should store the media containing the recorded information in an environment free from hazards that could affect the media. These hazards include magnetic fields, direct light, excessive moisture, and temperature extremes.
When you keep back-up records in a different medium, you should follow the media manufacturer's suggested procedure. You should give particular attention to the suggested shelf life of the medium.
If you contract with an outside party for the retention of your electronic records, you are responsible for ensuring that they are made available upon request.
When you keep backups of your electronic files, you have to ensure that the backed-up files can be restored in a format that we can access and use.
