Tax Advice: How Long Should I Keep My Income Tax Records?

Have you ever wondered what records you need to keep for your taxes and how long you should keep them for?

If you answered "yes" to that question, then this guide is for you.

We will walk you through how long to keep tax records in Canada and what documentation should be in your records. Let's dive into it.

Jump To:

• How Long to Keep Tax Records in Canada?
• Keeping Tax Records
• Tax Audits
• Missing or Destroyed Records
• Exceptions to the Rules for Record Retention
• When to Destroy Your Records?

How Long to Keep Tax Records in Canada?

In general, you need to keep all required records and supporting documentation for six-years from the end of the last tax year that they pertain to. The tax year is defined as the calendar year for individuals and the fiscal period for corporations.

For trusts, the tax year varies based on what type the trust is. All non-testamentary or graduated rate estate (GRE) trusts are typically required to use a tax year-end of December 31st. The only exception is for mutual fund trusts that elect December 15th as their year-end.

In the case of a GRE, the year-end date will be the day the estate is no longer considered a GRE. This date is determined to be no later than the thirty-six-month anniversary of the decedent's passing. For example, if an estate was created in July 2017 will have a year-end date in July of 2020.

Legislations that determine the record retention period are as follows:

• Excise Act, 2001
• Excise Tax Act (including GST/HST)
• Income Tax Act
• Employment Insurance Act
• Air Travellers Security Charge Act
• Canada Pension Plan

Appealing a Tax Judgment

If you are filing a tax objection or appeal, the CRA recommends that you keep your records until the issue is resolved and the time limit for any additional appeals expires. This may mean maintaining these records for longer than the standard six-year period.

Closure of Business

If you close a business, the amount of time you must keep your records depends upon the type of business that you ran.

Incorporated businesses must retain their records for two years after the dissolution date of the corporation. However, any unincorporated businesses (sole proprietorships or partnerships) must maintain their records for six years after the end of the last tax year.

Keeping Tax Records

How long you need to keep tax records is determined by the Canada Revenue Agency (CRA). Tax records that you need to keep are any organized financial or accounting documents that record your transactions and any documents that support these transactions.

Who Has to Keep Records

While this is not a complete list of everyone who must keep records by law, here are some examples:

• Anyone who has to file a tax return
• Anyone engaged in commercial activity or running a business
• Anyone who pays or collects taxes
• Payroll service providers and third-party record keepers
• Trusts
• Non-profit organizations
• Universities and colleges
• Municipal corporations
• Hospitals
• Qualified donees such as registered charities, Canadian amateur athletic associations, housing corporations, etc.

In addition to the list above, any holding companies and corporations that are no longer active must also keep records.

What to Keep

In general, any accounting or financial documents that record your transactions are documents you must keep. Here are some examples of these documents:

• Books, ledgers, or journals
• Charts and tables
• Income, excise, and GST/HST tax returns
• Sales invoices and purchase receipts
• Vouchers, contracts, and guarantees
• Financial statements and statements of accounts
• Cash and credit card receipts
• Bank statements, deposit slips, and cancelled cheques

Why You Should Keep Records

The primary reason to keep tax records is for tax savings. By keeping complete and organized records, you will have documentation of your deductible expenses and the input tax credits (ITCs) you may claim.

Complete records will also save you time if the CRA decides to audit your income or GST/HST tax returns. If auditors cannot determine your income or taxable revenue, they will need to use alternative methods to determine these amounts.

Tax Audits

Proper record retention is vital in case the CRA audits you. Let's go over what to do if the CRA decides to audit you.

Be Prepared

Preparation for a potential audit begins when you are filing your tax return. If you are claiming any expenses, deductions, or credits, be sure to have all documentation that supports your claims.

Ideally, you will have all of the required documents organized in a safe location, which we will discuss further below.

The CRA's Audit Powers

While the CRA has expansive auditing power, there are some limitations.

• The CRA must conduct the audit within the standard assessment period of three years for income tax returns and four years for GST/HST returns
• You will not have to provide any documentation subject to legal privileges, such as communication with a lawyer
• You should request a written account of who is being audited, and the years included in the audit should be requested from CRA to ensure the audit terms are clear to all parties involved
• A record of all communication with the auditor, the documentation provided to the auditor, and the time you provided the documentation should be kept in case there is ever an allegation that documentation was not provided or has gone missing

During the audit process, be sure to inform the CRA representative if you need more time to provide the requested documentation and the reason you cannot meet the original agreed-upon deadline.

Where to Keep Your Records

As determined by the CRA, you must keep your records at your residence or place of business in Canada unless the CRA provides you with written permission for them to be held elsewhere.

If you would like to request permission to keep your records elsewhere, you will need to write to your local tax services office. Should the CRA grant their written permission after reviewing your situation, the documentation will specify any applicable terms and conditions.

After the CRA permits you to keep your records outside of Canada, you must have them available for review by the CRA when requested.

Not everyone is allowed to keep records outside of Canada; these entities are as follows:

• Registered charities or amateur athletic associations
• Canadian municipalities
• Housing corporations exempt from tax
• Public bodies performing government functions

Electronic Records

You are allowed to keep records in an electronic format. However, unless the CRA has permitted you to keep your records elsewhere, they must still be stored in Canada.

Suppose the CRA does permit you to keep electronic records outside of Canada. In that case, they may accept copies if they are made available to CRA officials in a readable format by CRA software.

Missing or Destroyed Records

The burden of proof lies with the taxpayer for any claimed tax deductions. That is why you must keep complete records and take all reasonable measures to safeguard them.

Deductions Without Supportive Documentation

The CRA will likely deny your claims if you cannot produce the appropriate documentation to support your deductions when the CRA requests this documentation.

The only time the CRA may consider your claims without supportive documentation is if there is evidence that the records were stolen or destroyed. Examples of such evidence include copies of police reports, reports of a fire, or photographs of the damage.

Inadequate Records

If the CRA finds that your records are inadequate, they will request a written agreement for your documents to be maintained as required. They will follow up on this request with a letter or in-person visit to ensure compliance.

If they find that there has not been compliance with their request during their visit, the CRA will issue a formal requirement letter. This letter will describe all of the information you must record and document the legal consequences of failure to comply.

Data Protection

As mentioned above, because the burden of proof lies with the taxpayer, it is vital that your records are safeguarded and maintained. We highly recommended that you keep back copies on backup media, cloud storage, or in a safe physical location.

Appealing a Tax Judgment

If you are filing a tax objection or appeal, the CRA recommends that you keep your records until the issue is resolved and the time limit for any additional appeals expires. This may mean maintaining these records for longer than the standard six-year period.

Closure of Business

If you close a business, the amount of time you must keep your records depends upon the type of business that you ran.

Incorporated businesses must retain their records for two years after the dissolution date of the corporation. However, any unincorporated businesses (sole proprietorships or partnerships) must maintain their records for six years after the end of the last tax year.

Exceptions to the Rules for Record Retention

The CRA may request that you keep your records for longer than six years and notify you of this in-person or by registered mail. However, there are some situations where you may need to keep your records for a different period of time, with or without the request of the CRA.

These are some examples of such situations:

• Records concerning the share registry, long-term acquisitions or disposal of property, or historical information that affects the start-up, liquidation, or sale of a business should be maintained indefinitely
• When an income tax return is late, you should keep the records for six years from the date of filing
• When you have not filed a GST/HST tax return for a reported period that ended more than six years ago, you must file the return and maintain the records for six years from the date of filing
• If you file a tax adjustment note for GST/HST to a pension, you must keep the records for six years from the note's issuing
• If there is an objection or an appeal filed, you must keep all the required records until the resolution of the issue, the date to file a further appeal has passed, or the six-year period has ended, depending on which date is the latest
• When multiple corporations merge, the new corporation must keep records for each of the merged entities for six years
• Suppose you are the legal representative for a trust or deceased taxpayer. In that case, the records may only be destroyed after you receive a clearance certificate to distribute the assets under your control
• A registered donee must keep donation receipt copies for two years from the end of the year in which they received the donations
• If an incorporated charity dissolves, they must keep records for two years from the date of dissolution
• If a registered charity or amateur athletic association has its registration revoked, it must keep records for two years after the CRA revokes its registration

When to Destroy Your Records

As we've discussed, you must keep most records for six years from the year they relate to before you can destroy them. As a safety precaution, most individuals and businesses should keep their records for seven years to avoid any confusion as to when you can legally destroy your documents.

Requesting Permission to Destroy Records

In order to destroy your records or books, or account before the specified retention period, you must get the written permission of the CRA. You can acquire this permission by writing your local tax services office or by completing Form T137.

This request will only pertain to records that you must keep as designated by the Income Tax Act. The form must include:

• A list of the documents you wish to destroy
• The reason for the request
• All other pertinent information that supports your request for the destruction of the listed records

Keep in mind that the CRA's permission does not authorize the destruction of any records that you must keep under any other federal, territorial, municipal, or provincial laws. Anyone who destroys paper or electronic documents without the permission of the CRA may be subject to prosecution.

All Your Tax Questions: Answered

We've covered all the ins and outs of how long to keep tax records in Canada, what records to keep, and the exceptions to the rules.

Now that we've answered all of your questions, we have one for you. Are you ready to get the best rates on financial services for your business or personal affairs? If so, our team at Insurdinary is here to help. We are a leading financial comparison platform and can provide the best rates on everything from loans and mortgages, to credit cards and insurance. Reach out to us today. One of our expert advisors is looking forward to working with you.

Our Best Offers at your Fingertips

Allianz Travel Insurance

LEARN MORE

Online Life Insurance Quoter

LEARN MORE

Secure yourself with affordable life insurance from Canada’s top providers and be protected in minutes.

Online Group Insurance Quoter

LEARN MORE

Manulife Health & Dental Plan

LEARN MORE

Manulife Travel Insurance

LEARN MORE

GreenShield Health & Dental Plan

LEARN MORE

Square One Home & Tenant Insurance

LEARN MORE

EQ Bank

LEARN MORE

Personal Loans

LEARN MORE

No matter what kind of loan you need, we’ve got you covered. Select the loan product you’re looking for.

Manulife Bank

LEARN MORE

The service I received from this company was efficient and they followed through when I need further information and clarification. At all times Sehar and Eric were very helpful and professional with my policy and it was a relief to have it completed before my short deadline of travel - thank you.

Very simple and easy sign up process to ensure you are covered in case of a medical emergency while travelling.

Eric and Mariam were wonderful to work with over the phone, so helpful and very professional with a friendly tone.

I requested a travel medical insurance quote. Michael Breen was able to give me immediate information and processed my request same day.

I was shopping around for a basic insurance package to cover airline screw-ups. We already have medical. I got 3 quotes from different companies but none of them responded quickly, efficiently. Only Allianz.. Thanks to R’ceino and Eric for quick friendly service! Phew.

Great customer experience from both Mariam and Eric. They both answered all my questions and were very helpful. Thank you for the great service you provided

Eric Clementi was very professional, and he took the time to go through everything I needed. Great customer service!!

Emil was professional, friendly, efficient and informative. We will try to maintain contact with him for future trips.

Artmiz was very patient and took our information and got back to us promptly with the various options for our trips. We are happy with the pricing and she explained and sent our documents for review. She is very accessible and she forwarded all the proofs of insurance immediately.

Artmiz did a great job she was quick to respond to my inquiry and follow up to make sure I fully understood. I had an assumption which Artmiz proved to ge incorrect. When I wrote to verify she didn't just respond by email but called explained where I was wrong and proceeded to sell me the insurance by working with me through the application. By being thorough, helpfuland polite she got my business.

I spoke with Emil Daniel, he was able to get me the lowestInsurance premium for my up coming trip , he was so professional and pleasant giving me all options and great advise will use him again for all my insurance needs and would highly recommend him to friends

My husband and I dealt initially with R'ceino Ewing and subsequently with Dornaz to purchase our Cancellation, Interruption and Baggage Insurance for our upcoming cruise December 1/2024 to January 21/2025. They were both very supportive and most helpful in figuring out our needs. Hopeful to use them again for future needs!

I spoke with Christa and Eric. They were both helpful in advising on which policy is okay for me. Thank you.

R'ceino and Eric have been more than helpful in arranging my travel insurance.Have requested hard copy via Canada Post.Thank you.

The insurance broker (Eric Clementi) was clear with explaining the options available to me and processed my application in a timely manner.

My experience with Allianz insurance and Eric in particular was fantastic. They were well-priced, patient and professional. I was able to obtain extensive travel insurance for my mom at a reasonable rate. Would definitely use them again!

Awesome customer service. Highly experienced, knowledgeable and very attentive. Friendly and efficient. Eric dealt with my inquiry promptly and with much patience. I highly recommend this insurance company. Thank you so much Eric!

Yesterday with the assistance of Dornaz we were able to finalize and pay for our emergency medical insurance for travels to Portugal Spain and Italy this fall time. Everything went smooth and was pleased with the insurance packages provided.

I dealt with Dornaz re purchasing trip cancellation insurance. She was prompt in her responses to me and followed up with a phone call to address any of my questions. It was a pleasure working with her. Thank you.

Dornaz was excellent ! I found her when i googled medical insurance, plus another client referred her. I couldn't be happier and definitely refer her to anyone who needs travel insurance. The whole thing took less than 10 minutes! Thank you, Dornaz, You are the best! Colleen from Canada.

Best deal for Seniors needing travel insurance! Very pleasant experience resulting in amazing price! Thank you!!

We had excellent service with Eric. You are lucky to have him as an employee. He was very patience with us ( we are seniors) and very helpful.

Artmiz is extremely knowledgeable about the product. She had all the answers right at her fingertips, which was most helpful and efficient. There was no waiting for a quote, everything was fast, convenient and, I believe, cost-effective. The whole process was a good experience.I checked out several other industry providers and found yours to be by far the best, in terms of convenience, friendliness, and a very knowledgeable agent.Bottom Line. On a scale of 1 to 10. A solid 10.Many Thanks, Bill Buchanan

Eric was great to deal with. No pressure at all. He went through any questions I had and answered honestly. again NO pressure to get any policy and when I chose one he went through the questions and we sealed a policy that fit my needs.Thanks Eric!

Dornaz got back to me quickly with quotes, she was wonderful to speak with and found me the best price for my insurance

Getting ins is no issue..if we need to use it..its unknown how you help us in support.Telephone call was very good.Thankyou for great satisfaction

Are you Looking for a trader that can help you in managing your Bitcoin for profitable returns, don't hesitate to contact Mrs. Hayden Charlotte. i decided to give her a try by investing $500 in her trading platform six days after my investment in her company i received an incredible profit of $7400, i was very happy, and requested for withdrawal to confirm and it was successful and the withdrawal worked perfectly. Thanks Charlotte you're truly a Forex / crypto expertise. If you're interested investing in forex or having difficulty trading i highly recommend Hayden Charlotte. Reach her through the links below.

Wow this unbelievable! I never thought I can make real money from Forex trading. I thought everyone on the platform were just scammers who have no human feelings . I got scammed a few times. Please be careful while investing I know there are real managers and I have met one. Mrs lilian wilson is a real and legit manager who will do anything just to make you get your profits after your trade duration . She has done that for me, now I don't have to worry about cashing out my profits . She will put a smile on my face once again, you can contact her via Email: lilianwilson220@gmail.com
WhatsApp: +1 (714) 698-9275

This comfortable and good standard of living I now enjoy with my family, is all thanks to you Ma'am Helen Edwin, before now I had a low income and did a lot of online trade which no profit, but you can like an angle and change all of that in just one week, you turned my $600 to $8,450 with your intelligence as an expert and from that day I had made more profit each week investing more, there is no amount of thanks that will be enough for what you have done for me and my family, but I promise Ma'am I will speak of your honesty,handwork and trust to the world, this is dream come true for me for finding a legit account manager like you, I advice the entire public to invest with Mrs Helen Ewdin cox and be financially sable contact her on the following
Email: helenedwin066@gmail.com
WhatsApp: +1 (315) 407-1224

I highly recommend Mr Danny A Stewart to you because he's a very true and genuine man. So I finally decided to introduce my trading manager to you if you're interested in $8,500 earnings weekly in crypto (binary) trading. Whatsapp +12066725974 or click on the name below to contact him directly here on facebook;
👇👇👇👇
Danny A Stewart
👆👆👆👆
Telegram: Danny_stewart93

Words can't really express how much happiness Mr Ralph Carico platform has brought into my life, my home is filled with joy and gladness, I say a big thanks to you and your platform and i will keep investing with you Ralph Carico thank you so much.

I have seen and tried different strategies and methods even lost alot of money while trying. Until i was introduce to this new strategy that got me back on track and i have been able to regain my lost money and still making consistent growth on all of my trade. Mrs victoria crypto is an amazing trader, she steadily lifted me out of financial penury. If you are interested and tired of losing your money You can reach her
Whatsapp: +1 (702) 919-0093
Email: victoriacrypto062@gmail.com

I had the best experience working with Mrs Jessica Wayne, She started managing my trading account with my first deposit of $1000 and made over $10,550 in less than 2 weeks Thank you for making the process stress free! Highly recommend Mrs Jessica Wayne to anyone regarding their account managing needs! she's very hardworking and her professionalism is top-notch and worth sharing for the benefit of other's, Contact her and you won't be disappointed her service is one of the best and I'm glad to testify about it anywhere, anytime this is the most lucrative and stress-free business that I've ever invested on. DM her WhatsApp:+19186093473 or
Email: jessywayne2j2@gmail.com

We had just lost our son 😭😭 there was no hope for me and my husband, we lost our jobs and suffered looking for another job luckily my husband came across McInn Griffin on Facebook review about forex and Bitcoin trade/ crypto currency exchange I borrowed $1000 to invest with McInn Griffin and I have a profit of $13800 in 6 working days now we have all our credit cards paid off and we are very grateful to you Sir I will advise all of you who want to invest for the future to connect with him please and please you should not invest with all these scammers out here who asks you for money. You do not have to give him anything and you can reach McInn Griffin via
Email: griffinmcinn54@gmail.com
WhatsApp Number : +12134438269 he is very trustworthy and reliable, check his name on Facebook.
"Success doesn’t come to you, You go to it. I’m not the one to call you to invest and have a bright financial situation. If you know what’s right, you’re supposed to contact him now and start trading ASAP”

So quick and efficient. Sourabh was very accommodating and helpful to what I needed for health insurance. They were able to call me back without having to have waited 1-2 business days. Love it!

It was convenient and easy. Chris couldn’t have treated us better if he’d been sitting right beside us. Great experience!

The application process was easy and they were able to get me a great rate! The customer service was excellent!

Gautam was very helpful in making my decision about which insurance to purchase. I would recommend this insurance company

George was helpful quick and knowledgeable with helping me find something suitable and that worked best at that. I definitely recommend Insurdinary for all of your insurance needs. Thanks George!

Make it possible to contact a CSR who doesn't transfer me around 7 times before telling me they can't find their own policy issued to a customer - a policy number taken from their own letterhead!! I will tell everyone I know, in every way, to avoid your company at all costs. If I have to, I will contact CBC W5 or Marketplace. Manulife, you have messed with the wrong estate executor!!

We had an excellent experience with Insurdinary. We strongly recommend them for insurance. Very pleasant to speak with. Fast and easy. We will be telling our family and friends all about it. Give them a call.

Thank you so much George for your help , you so quick to respond me back and help me lots everything done so quickly. The best services ever. I will recommend to all my friends . Thank you so much I do really appreciated it..

It was a pleasure speaking with you today:) Answered all my questions and found the best plan for me to meet my needs at the best price. Thanks again , George!

Disclaimer: Insurance products and services are provided by Alliance Income Services Corp. (AIS Corp.). Alliance Income is contracted with most insurance providers in Canada excluding General Lines Insurance products. Users also have the option in contacting the insurer directly, irrespective of whether AIS Corp. provides the service for various types of insurance products.

Get your FREE no obligation quote today!

Insurdinary.ca is a technology-geared insurance information and financial platform. The information provided here is strictly for recommended purposes only and does not constitute any legal, insurance or financial advice. Insurdinary.ca does not advocate or guarantee the accuracy or wholeness of the information provided; including but not limited to insurance policies and or any financial applications. It is strongly advised to seek professional advice before making any decisions. Any losses or damages arising from the direct use of the information located on the platform is not the responsibility or liability of Insurdinary.ca. Despite continuous updates, we can not confirm, verify or vouch for the validity of the information presented. For a more precise depiction of information, please visit the corresponding affiliate sites to confirm accuracy. Insurdinary.ca is commissioned by some of its affiliates - this may include advertisements and receiving fees for certain links and actions available on our platform. Reviewing differentiating terms and conditions provided by the affiliate and between the user, is recommended. Our outstanding calculating tools and educational blogs are available to you 24/7 and will always remain free. For further information on our services, visit our about us page.