How Long Should a Canadian Business Keep Records and Receipts?

The six year rule and why it is only the starting point

CRA’s keeping records guidance says businesses generally keep books, records, and supporting documents for six years from the end of the last tax year to which they relate. For a corporation, the tax year is its fiscal period; for many other taxpayers it is the calendar year. This wording matters. The clock is tied to the last year a record relates to, not always the date the paper was created. A document supporting a capital asset may remain relevant until the asset is sold and the resulting tax treatment is reported.

There are special rules for dissolved corporations, businesses that cease, long term acquisitions and disposals, objections or appeals, and records CRA requires a person to retain longer. Destroying records earlier generally requires written CRA permission. A simple annual purge based only on the invoice date can therefore remove evidence that is still needed. A retention policy should categorize records and flag items connected to assets, ownership, corporate history, litigation, or unresolved tax matters.

What counts as a useful business record

Records include ledgers, journals, invoices, receipts, bank and credit card statements, contracts, payroll details, tax returns, correspondence, financial statements, and data created by accounting, point of sale, purchasing, inventory, and tax preparation systems. CRA requires enough detail to determine obligations and entitlements. A bank transaction proves that money moved, but it may not prove what was bought, the business purpose, the GST/HST charged, or whether the purchaser was the correct legal entity.

For expenses, keep the supplier invoice or receipt and add context when the business purpose is not obvious. For vehicle travel, meals, mixed use costs, subcontractors, home office items, and reimbursements, maintain the supporting schedule and approval. For revenue, preserve sales invoices, contracts, deposit reports, payment processor statements, and reconciliations. Good records support deductions, GST/HST input tax credits, payroll reporting, financing applications, and management decisions at the same time.

Cloud accounting does not transfer responsibility

CRA says a business remains responsible for adequate records even when a bookkeeper, accountant, internet transaction manager, or application provider keeps them. Electronic records need to remain in an electronically readable format for the required period. Plan for vendor changes: export the general ledger, transaction details, attachments, payroll reports, tax filings, audit logs, and master lists before closing software access. Test backups and use permissions that prevent casual deletion or alteration.

Create a monthly close folder with reconciliations and a year end archive with filed returns, confirmations, assessments, working papers, and legal documents. Use consistent file names and store source documents with the transaction when possible. Access should be secure, but records must be retrievable when CRA requests them. A disciplined system reduces tax risk and saves owner time because questions can be answered from evidence rather than memory. Ask for advice before destroying records when the business has ceased, assets remain relevant, or a review is unresolved.

• Keep source documents and transaction level data for the required period.
• Record business purpose where an invoice does not tell the full story.
• Export readable data before changing cloud providers.
• Extend retention for assets, disputes, and other special situations.