CRA Record-Keeping Requirements: What Records to Keep and for How Long

Canadian taxpayers and businesses are required to keep adequate books, records, and supporting documents so that the Canada Revenue Agency (CRA) can verify their tax obligations and amounts reported on their returns.

For many records, the general retention period is six years. However, important exceptions apply, and some records may need to be kept considerably longer.

This guide explains what records the CRA expects taxpayers to keep, how long records should be retained, rules for electronic records, where records may be stored, and why proper record keeping can become particularly important during a CRA audit or tax dispute.

What Are the CRA Record-Keeping Requirements?

Section 230 of the Income Tax Act requires persons carrying on business, as well as certain persons required to pay, deduct, withhold, or collect amounts under the Act, to maintain adequate records and books of account.

The records must contain enough information to allow the CRA to determine:

Income earned;
Expenses claimed;
Taxes payable;
Amounts required to be deducted or withheld;
Amounts required to be collected or remitted; and
Other amounts reported on a tax return.

The Income Tax Act does not require every taxpayer to use one particular accounting system. The important question is whether the records are sufficient to establish the taxpayer’s tax obligations.

For official CRA guidance, see the CRA Keeping Records guidance.

Who Has to Keep Tax Records?

Record-keeping requirements can apply to many taxpayers and organizations, including:

Sole proprietors;
Corporations;
Partnerships;
Employers;
GST/HST registrants;
Trusts;
Registered charities and other qualified donees; and
Other persons required to pay, collect, deduct, or remit amounts under Canadian tax legislation.

Even individuals who do not operate businesses should retain supporting documents for deductions, credits, property transactions, investment transactions, and other amounts reported on their tax returns.

What Records Should a Business Keep?

The records required depend on the business and the transactions involved.

Common business records include:

Sales invoices;
Purchase invoices and receipts;
Bank statements;
Credit-card statements;
Deposit records;
Cancelled cheques or payment records;
General ledgers;
Journals;
Financial statements;
Payroll records;
GST/HST records;
Contracts and agreements;
Inventory records;
Vehicle expense records;
Travel and meal documentation;
Property purchase and sale records;
Loan agreements;
Shareholder loan records; and
Supporting correspondence and electronic records.

How Long Do You Have to Keep Tax Records in Canada?

As a general rule, taxpayers must retain required records and supporting documents for six years from the end of the last taxation year to which the records relate.

For example, where a record relates solely to the 2025 calendar taxation year, the general six-year period would normally run from the end of 2025.

The applicable tax year differs depending on the taxpayer. For individuals it is generally the calendar year, while corporations generally use their fiscal taxation year.

What If a Tax Return Is Filed Late?

If an income tax return is filed late, the ordinary six-year calculation may not apply in the usual way.

The CRA states that where a return is filed late, the taxpayer generally must keep the supporting records for six years from the date the return was actually filed.

This can result in records having to be retained much longer than six years after the taxation year itself.

Are Some Tax Records Required to Be Kept Indefinitely?

Yes.

Certain records should not be destroyed merely because six years have passed.

The CRA identifies records involving long-term acquisitions and dispositions of property, share registries, and other historical information that may affect the sale, liquidation, or winding-up of a business as records that may need to be kept indefinitely.

Examples may include:

Records establishing the adjusted cost base of real estate;
Records establishing the cost of shares or investments;
Corporate share registers;
Records of major capital acquisitions;
Corporate reorganization documents;
Section 85 rollover documentation;
Estate-freeze documentation; and
Other records that may affect a future tax calculation.

Destroying these records simply because they are old can make it difficult to establish tax consequences years later.

How Long Should Records Be Kept During a CRA Objection or Appeal?

If a taxpayer files an objection or appeal, relevant records should generally be retained until the latest of:

The date the objection or appeal is resolved;
The date the time for filing any further appeal expires; and
The end of the ordinary record-retention period.

This means records should not be destroyed simply because six years have passed where they remain relevant to an ongoing tax dispute.

For information about challenging a reassessment, see our Notice of Objection guide.

Can the CRA Require You to Keep Records Longer Than Six Years?

Yes.

The CRA may require a taxpayer to keep records for a longer period.

If the CRA requires extended retention, it may notify the taxpayer of the additional period during which the records must be preserved.

Can You Destroy Records Before Six Years?

Generally, taxpayers should not destroy required records before the applicable retention period expires.

A taxpayer who wants to destroy records earlier can request written permission from the CRA.

If permission is granted, the CRA may impose conditions on the early destruction of those records.

Can Tax Records Be Kept Electronically?

Yes.

Tax records can generally be maintained electronically.

However, section 230 of the Income Tax Act requires persons who keep records electronically to retain them in an electronically readable format for the applicable retention period.

Simply keeping a printed copy of information that originally existed in an electronic accounting system may not necessarily satisfy every electronic record-retention requirement.

Businesses should ensure that electronic records remain:

Accessible;
Readable;
Organized;
Complete;
Capable of being provided to the CRA when requested; and
Supported by appropriate backups.

Can Paper Records Be Scanned and Stored Electronically?

In many circumstances, paper documents can be converted into electronic form.

Businesses should ensure that electronic images accurately reproduce the original records and retain sufficient detail to support the amounts reported to the CRA.

Special care should be taken before destroying original documents that may have independent legal significance, relate to ownership or title, or may be needed in litigation.

Where Must Tax Records Be Kept?

Section 230 generally requires relevant books and records to be kept at the taxpayer’s place of business or residence in Canada, or at another place designated by the Minister.

The CRA may permit records to be maintained at another location, including outside Canada.

Can Tax Records Be Stored Outside Canada?

Potentially, but CRA permission may be required.

If the CRA permits records to be kept outside Canada, the taxpayer may still be required to make those records available in Canada when requested.

Electronic records stored on servers outside Canada can also create record-access issues.

The CRA states that where electronic records are maintained outside Canada with permission, taxpayers may need to provide accessible electronic copies in Canada in a format the CRA can read.

What If Your Accountant or Bookkeeper Keeps Your Records?

Using an accountant, bookkeeper, cloud accounting provider, or other third party does not transfer responsibility for record keeping away from the taxpayer.

The taxpayer remains responsible for ensuring that adequate records are maintained and can be provided to the CRA if requested.

This can become important if:

An accountant retires;
A bookkeeping relationship ends;
Cloud software access is cancelled;
A business changes accounting systems; or
A third-party service provider loses or deletes data.

What Does the CRA Mean by “Adequate Records”?

Records are generally considered adequate where they contain enough information to determine the taxpayer’s tax obligations and verify amounts reported on tax returns.

A taxpayer does not necessarily need one particular bookkeeping format or accounting program.

However, records should be sufficiently complete and reliable to allow income, expenses, assets, liabilities, taxes collected, deductions, and other relevant amounts to be verified.

What Happens If Your Records Are Inadequate?

Under subsection 230(3) of the Income Tax Act, where a person has failed to maintain adequate records and books of account, the Minister may require that person to keep the records specified by the CRA going forward.

Inadequate records can also create significant practical problems during an audit.

Where the CRA cannot reliably verify income or expenses from the taxpayer’s records, it may use other available evidence or indirect audit techniques to determine income.

This can include techniques such as bank-deposit analysis or a net worth assessment.

For more information, see our CRA Net Worth Audit guide.

Can Missing Records Cause the CRA to Deny Expenses?

Potentially.

A taxpayer claiming a business expense or deduction should generally be able to substantiate the amount and its connection to earning income.

If invoices, receipts, contracts, bank records, or other supporting evidence are unavailable, the CRA may question or deny the claimed amount.

However, the absence of a particular receipt does not necessarily determine every tax dispute automatically. Other credible evidence may sometimes help establish that a transaction occurred.

What Happens to Records During a CRA Audit?

The CRA may request records and supporting documentation relevant to the issues under review.

Depending on the audit, this can include:

Accounting records;
Bank statements;
Invoices;
Receipts;
Contracts;
Electronic accounting data;
Corporate records;
Personal financial information where relevant; and
Other documents needed to verify the tax return.

If you have received an audit request, see our CRA Audit Letter: What to Do Next guide.

For legal representation during an audit, visit our CRA audit lawyers page.

Can Poor Records Lead to a Net Worth Assessment?

They can be one factor.

If the CRA considers the taxpayer’s books and records inadequate or unreliable, it may use indirect methods to test or estimate income.

A net worth assessment compares changes in a taxpayer’s assets and liabilities together with personal expenditures and known sources of funds.

That does not mean every taxpayer with imperfect bookkeeping will automatically face a net worth audit, but poor records can make an audit considerably more difficult to defend.

Can Record-Keeping Issues Lead to Penalties?

Depending on the circumstances, inadequate records can contribute to disputes involving additional tax, interest, or penalties.

However, an error in record keeping does not automatically establish gross negligence.

If the CRA imposes a gross negligence penalty, the penalty must satisfy its own statutory requirements.

For more information, see our CRA Gross Negligence Penalties guide.

What Records Should You Preserve When a CRA Dispute Begins?

Once an audit, reassessment, objection, or appeal begins, taxpayers should be cautious about destroying anything that may relate to the dispute.

Relevant records may include:

CRA correspondence;
Tax returns;
Accounting records;
Banking records;
Emails and text messages;
Contracts;
Invoices and receipts;
Corporate records;
Working papers;
Records provided to accountants;
Documents relating to disputed transactions; and
Records supporting the taxpayer’s explanation of the facts.

These documents can later become important during the CRA objection process or a Tax Court appeal.

Frequently Asked Questions About CRA Record Keeping

How many years of tax records should I keep in Canada?

The general rule is six years from the end of the last taxation year to which the records relate, although important exceptions can require records to be kept longer.

Do I need to keep receipts for six years?

Supporting documents such as receipts generally should be retained for the applicable record-keeping period where they are needed to verify amounts reported on a tax return.

Can I keep my tax records electronically?

Yes. Electronic records are permitted, but records that are maintained electronically must generally remain electronically readable throughout the required retention period.

Can I throw away old tax records after six years?

Not always. Records involving property, share ownership, historical transactions, ongoing objections or appeals, or other matters with continuing tax consequences may need to be kept longer.

Do I need CRA permission to store records outside Canada?

CRA permission may be required to maintain records somewhere other than the location required by the Income Tax Act. Records kept outside Canada may still have to be made available in Canada for CRA review.

What if I do not have receipts during a CRA audit?

The CRA may challenge unsupported expenses or other amounts. Depending on the circumstances, other documentary or testimonial evidence may be relevant, but the absence of adequate records can make the dispute more difficult.

Should I destroy records while a CRA objection is ongoing?

No. Records relevant to an objection or appeal should generally be retained until the applicable dispute and further appeal periods are complete, even where the ordinary six-year period would otherwise have expired.

Speak With a Tax Lawyer About a CRA Audit or Record-Keeping Dispute

Record-keeping issues can become particularly important when the CRA challenges business expenses, alleges unreported income, uses an indirect audit method, or requests years of supporting documentation.

KR Law Firm represents individuals and businesses in CRA audits, objections, reassessments, penalties, and Tax Court proceedings.

Book a Free Consultation with one of our tax lawyers to discuss a CRA audit or tax dispute.

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By Kaveh Rezaei – Principal Lawyer, KR Law Firm

Disclaimer: This article provides general information only and does not constitute legal advice. Record-keeping obligations depend on the taxpayer, the applicable legislation, the type of records involved, and the circumstances of any CRA review or dispute.