\n
![](\"https:\/\/images.squarespace-cdn.com\/content\/v1\/509ed143e4b001bf11102ee6\/1762549069555-71P9OVM9YPRYJK5VC68H\/unsplash-image-05HLFQu8bFw.jpg?format=1500w\")
<\/p>\n
\n<\/p>\n
If you\u2019ve been in business or a solopreneur\/self employed for some time, you\u2019ve probably wondered how long you need to keep your business related documents. Shoeboxes and\/or filing cabinets take up physical space that is often limited and can be better used for more important things (like a nice cabinet or artwork).<\/p>\n
Unfortunately, you can\u2019t just dispose of these business related records at anytime. The Canada Revenue Agency (CRA) has strict rules about where<\/strong> your records must be kept, how long<\/strong> you need to keep them, and what to do<\/strong> if you want to destroy them before the end of the specified retention period.<\/p>\n The CRA requires you to keep your business records at your place of business or residence in Canada<\/strong><\/a>, unless you receive written permission to keep them elsewhere.<\/p>\n If your records are stored electronically on a server outside of Canada<\/strong>, that doesn\u2019t count as \u201cin Canada\u201d even if you can access them from here.<\/p>\n You can request permission to keep records outside of Canada by writing to your tax services office<\/strong>. The CRA will likely approve your request, but they\u2019ll specify any terms or conditions in writing.<\/p>\n If approved, you must ensure that the CRA can access your records electronically in Canada<\/strong>, that the files are readable using CRA software<\/strong>, and that they provide enough detail to support the information on your returns.<\/p>\n Tip:<\/strong> If you\u2019re using cloud accounting software (like QuickBooks Online or Xero), its a good idea to check where your data is hosted. <\/p>\n Tip:<\/strong> Both CRA and RQ accept electronic documents as long as there are clear and legible and complete. For more details check out my article on digitizing your documents and maintaining a paperless office<\/a>. <\/p>\n For more details on the rules, check out CRA\u2019s guidance in Information Circular IC05-1 (Electronic Record Keeping)<\/strong><\/a> and GST\/HST Memorandum 15.2 (Computerized Records)<\/strong><\/a>.<\/p>\n In general, you must keep all business records and supporting documents for six years<\/strong> from the end of the last tax year they relate to<\/strong>.<\/p>\n That includes:<\/p>\n Invoices and receipts (sales and expenses)<\/p>\n<\/li>\n Bank and credit card statements<\/p>\n<\/li>\n Tax returns and schedules<\/p>\n<\/li>\n Payroll, GST\/HST, and other supporting records<\/p>\n<\/li>\n<\/ul>\n Your tax year is:<\/p>\n So, for example, if your 2025 tax year ends on December 31, you must keep those records until December 31, 2031<\/strong>.<\/p>\n There are several situations where the retention period is longer (or shorter):<\/p>\n Property and share records:<\/strong> Keep indefinitely, since they can affect future capital gains or liquidation.<\/p>\n<\/li>\n Late-filed returns:<\/strong> Keep records for six years from the date the return was filed.<\/p>\n<\/li>\n Objections or appeals:<\/strong> Keep everything until the later of (a) the objection\/appeal is resolved, (b) the appeal period has passed, or (c) the six-year period has ended.<\/p>\n<\/li>\n Unfiled GST\/HST returns:<\/strong> You must still file them and keep supporting records as the six-year clock doesn\u2019t start until they\u2019re filed.<\/p>\n<\/li>\n Dissolved corporations:<\/strong> Keep all records for at least two years<\/strong> after dissolution.<\/p>\n<\/li>\n Business closure (unincorporated):<\/strong> Keep records for six years<\/strong> from the end of the tax year in which the business closed.<\/p>\n<\/li>\n Mergers or amalgamations:<\/strong> The new corporation must keep the records of all former entities for six years.<\/p>\n<\/li>\n Deceased taxpayers or trusts:<\/strong> You can destroy records once a CRA clearance certificate<\/strong> has been received.<\/p>\n<\/li>\n<\/ul>\n Tip:<\/strong> When in doubt, keep it! Digital storage is inexpensive, and keeping good records can save time and stress in an audit or sale.<\/p>\n If you want to destroy your paper or electronic records before<\/strong> the end of the retention period, you must get written permission from the CRA<\/strong>.<\/p>\n You can:<\/p>\n Destroying records without CRA permission could result in penalties or prosecution<\/strong>.<\/p>\n Keep in mind, CRA approval only applies to records under federal tax legislation. You may need to comply with provincial or municipal<\/strong> record retention rules as well.<\/p>\n Tip: If your records were destroyed in a disaster<\/strong>, visit the CRA\u2019s \u201cSupport if You\u2019re Affected by a Disaster\u201d page for instructions on what to do.<\/p>\n The easiest way to ensure that you are compliant with these rules is to make maintaining records as part of your regular workflow.<\/p>\n Use accounting software that automatically stores receipts and transactions.<\/p>\n<\/li>\n Organize digital folders by year and category.<\/p>\n<\/li>\n Back up your data securely (ideally both in the cloud and locally).<\/p>\n<\/li>\n<\/ul>\n To summarize, it is essential that you keep your business records in Canada (unless you have CRA permission), hold on to them for at least six years, and don\u2019t destroy them early unless you have written approval.<\/p>\n<\/div>\nWhere to Keep Your Records<\/h2>\n
How Long to Keep Your Records<\/h2>\n
\n
Exceptions and Special Cases<\/h2>\n
\n
How to Request Permission to Destroy Records Early<\/h2>\n
Final Thoughts<\/h2>\n
\n